In a major speech to healthcare industry leaders early Wednesday morning, Health and Human Services Secretary Alex Azar shared with his audience at the World Health Care Congress, being held at the Marriott Wardman Park Hotel in Washington, D.C., his agency’s broad strategies for transforming the U.S. healthcare system. Azar pointed to what he sees as the absolute necessity of fundamentally transforming the healthcare system to make it less costly, more transparent, more consumer-centric, of higher documented quality, and better connected through data and information.
Among the top priorities Secretary Azar cited early on in his speech: accelerating the value-based transformation of the healthcare system; combatting the opioid abuse crisis; and addressing the cost and quality of U.S. healthcare. Speaking of the healthcare system he envisions, he said that “Such a system will pay for health and outcomes rather than sickness.”
Further, Azar said, “We at HHS know that the idea of value-based transformation is not new. President Bush, in whose administration I served, and President Obama, both worked on this. I personally worked on this under Mike Leavitt,” a Bush Administration HHS Secretary. “HHS has often lagged behind the private sector, where so many of you have made so much progress,” he said. “Everyone here recognizes that the current system will not last,” as it has become unsustainable because of its cost.
HHS Secretary Alex Azar speaking Wednesday
Azar cited four top goals for HHS as an agency in the immediate future: “maximizing the promise of health IT; improving transparency in price and quality; pioneering bold new models in Medicare and Medicaid; removing artificial regulatory barriers and burdens that impede care coordination.” And, he added, “The best way to identify and reward value is through a marketplace of many players, and where necessary, through third-party payers.”
Azar spent some time promoting the rollout of the Blue Button 2.0 program, which Seema Verma, Administrator of the Centers for Medicare and Medicaid Services (CMS), had promoted both at the HIMSS Conference on March 6, and again on Monday at the World Health Care Congress. Indeed, as Administrator Verma had said on Monday, Blue Button 2.0, which is a part of the broader CMS MyHealthEData Initiative that she had announced at HIMSS18 on March 6. On Monday at WHCC, Verma had described Blue Button 2.0 as “a developer-friendly, standards-based API [application programming interface], which will allow a majority of beneficiaries connect their claims data to payers. We are also working to advance price transparency,” she added. “In virtually every sector of the economy, you are aware of the cost of services before you accept them. Patients need to know” the costs and value of healthcare services received, she said. What’s more, she said, “We are proposing a requirement that hospitals post their charges online. We’re just getting started, and are asking for input” from provider leaders nationwide.
Compelling provider pricing transparency, via rulemaking
With regard to that, Azar spent some time talking about a major element in the proposed rule for 2019 the draft Fiscal Year 2019 Inpatient Prospective Payment System, which was announced on April 24. As articulated on the HHS website, “CMS’s proposed policy changes include: requiring hospitals to post their standard list of prices on the Internet and in a machine-readable format, rather than just being required to make them available in some form; focusing the Electronic Health Record Incentive Program on promoting interoperability, to allow patients to control their records and access them in a usable format; eliminating duplicative. overly burdensome, or out-of-date quality measures through the ‘Meaningful Measures’ initiative.” That April 24 announcement also noted that “CMS also issued a Request for Information soliciting comment on new ways to: “Stop “surprise billing” by providers; provide patients better information up front about the out-of-pocket costs they will face; encourage further transparency from providers, including providing tools for comparing prices and making public which institutions are out of compliance with transparency measures; push providers reimbursed by Medicare to take more steps in making their electronic health records interoperable.”
“We’ve spent more than a decade talking about the importance of interoperability,” Azar said this morning. “Today, progress has been made on interoperability, but more importantly, new technology has made it possible for govt to be focused on the what, not the how, of interoperability. Patients ought to have access to their own data, period,” he said. “But they also need access to data on price and quality. Knowledge is power. And knowing more information can lead to better healthcare.”
Meanwhile, with regard to the pricing transparency element of the proposed rule, Azar said, “I want to share a personal story. A few years ago, my doctor, whom I love—wanted me to do a routine echocardio stress test. I thought this would be very routine. But his practice is connected to a major medical center. And so, instead of being referred for a [physician practice-based stress test], I was sent a few floors down, sent to a woman who was asking the same questions I’d answered before. Before I know it, I had a plastic wristband, and I had been admitted to the hospital. And I was going to be paying for that test out of pocket, because I was in a high-deductible health plan. And as someone who works in healthcare, I knew that that cost has just jumped.”
So, Azar continued, “I asked how much that test would cost, and I was told that that information wasn’t available. Eventually, the manager of the clinic appeared, and said that the list price was $5,500. I knew that wasn’t the right answer either, but rather, the price that my insurance company had negotiated. That information didn’t come easily either, but eventually I found out it was $3,500. So I looked up what it would cost if I received this procedure in a doctor’s office, which was $550. Now there I was, the former Deputy Secretary of Health and Human Services for the United States—and that’s the amount of effort I needed to make to get that information. What if I was a busy parent who just trusted their doctor and the system? A twenty-something, just enrolled in a high-deductible plan?” That experience, he said, concretized for him why health services pricing transparency is an absolute necessity, if consumers are going to be empowered to make choices that will lower the cost of their healthcare and force greater value out of the U.S. healthcare system. Going back to his reference to the release of the proposed PPS rule, Azar said, “We’ve proposed that hospitals be required to post a standard list of their charges on the Internet, machine-readable. We know that real transparency will require a lot more than this, so we included an RFI in the rule,” in order to solicit input from and dialogue with, hospital and health system leaders.
Direct contracting proposal
Next, Azar made some comments related to the April 23 announcement by CMS “releas[ing] the comments submitted by patients, clinicians, innovators, and others in response to the CMS Innovation Center’s New Direction Request for Information (RFI). Last fall,” that announcement had said, “CMS released the RFI to collect ideas on a new direction for the agency’s Innovation Center to promote patient-centered care and test market driven reforms that: empower beneficiaries as consumers, provide price transparency, increase choices and competition to drive quality, reduce costs, and improve outcomes. The Innovation Center is a central focus of the Administration’s efforts to accelerate the move from a healthcare system that pays for volume to one that pays for value and encourages provider innovation.”
Further, that April 23, announcement had said that, “Today, CMS is also taking a next step to develop a potential model in the area of direct provider contracting, informed in part by the RFI. A direct provider contract model would allow providers to take further accountability for the cost and quality of a designated population in order to drive better beneficiary outcomes. Such a model would have the potential to enhance the doctor-patient relationship by eliminating administrative burden for clinicians and providing increased flexibility to provide the high-quality care that is most appropriate for their patients, thus improving quality while reducing expenditures.”
Referencing that announcement, Azar said this morning that “The final two areas of innovation we are focused on are engaging in new models of payment for Medicare and Medicaid, and removing obstacles to innovation.” In that, he said, “We’re going to think big and bold. Alongside the 1,000-plus comments we released, we’re going to focus on direct provider contracting in Medicare. These can offer the opportunity for seniors to receive convenient, accessible care from the physician they know, at a reasonable cost. We look forward to consulting with all of you on how these arrangements might work,” he said. “The direct provider contracting proposal also reflects our interest in reducing burdens on providers, especially on those that might impede care coordination.”
And, with regard to “removing obstacles to innovation, Azar noted that, recently, “We’ve been able to deal away with certain quality measures” in the value-based purchasing program under Medicare that gave us no meaningful information. In the next couple of months, you’ll see continuing efforts that can foster innovation by putting people over paperwork,” he said, further, he added, “Last week, CMS took the historic step of maximizing the data we have under our roof. This year, we’ll be releasing Medicare Advantage data publicly for the first time. We look forward to the insights that academic researchers and private innovators can gain from MA data. We’re also going to be releasing anonymized Medicare FFS data and children’s health data, in 2019. There’s an opportunity there for providers, payers. Silicon Valley’s been begging us to give them this data. Now, we look forward to seeing the insights that can be gained” from its public release.
All of Us Program
Azar also put in a plug for a new nationwide program just announced the day before by the National Institutes of Health, one of the agencies within the HHS umbrella, the All of Us Research Program, which will gather together personal health data from at least one million Americans, in order to create something like a national personal health census, as Azar noted. As described in the announcement on the NIH website, “On May 6, the National Institutes of Health will open national enrollment for the All of Us Research Program, a momentous effort to advance individualized prevention, treatment and care for people of all backgrounds. People age 18 and older, regardless of health status, will be able to enroll. The official launch date will be marked by community events in seven cities across the country as well as an online event. Volunteers will join more than 25,000 participants already enrolled in All of Us as part of a yearlong beta test to prepare for the program’s national launch. The overall aim is to enroll 1 million or more volunteers and oversample communities that have been underrepresented in research to make the program the largest, most diverse resource of its kind.”
That announcement quoted Secretary Azar as saying, “All of Us is an ambitious project that has the potential to revolutionize how we study disease and medicine. NIH’s unprecedented effort will lay the scientific foundation for a new era of personalized, highly effective health care. We look forward to working with people of all backgrounds to take this major step forward for our nation’s health.”
This morning, Azar told his audience, “I encourage all of you to join. This unprecedented gathering of knowledge has the potential to transform care as we know it. Value-based care is not just about quality,” but also about the information that can be collected nationwide in order to fuel provider innovation.
Azar also referenced issues around pharmaceutical pricing. “We also want to lower the high prices of drugs,” he said. “HHS is working with the president to focus on a number of issues, including high-list prices, seniors in government programs overpaying for drugs, and foreign governments getting a free ride on American innovation. We’re working on this. I can assure you the President wants to go further, much further. Action is desperately needed. I believe we can help lower the cost of medicine while still stimulating innovation. We have to do so going forward.”
Concluding his speech, Secretary Azar said that the potential for change, and the initiatives he had just referenced, are among the reasons “why I’m so optimistic.” Fundamentally, he said, “The time has simply come for this [transformational change] to happen. The status quo just cannot hold. The way we do business in American healthcare, from insurance, to IT, to drug pricing, to patient billing, has got to change.” He said he believes that “The power of informed individuals will deliver high-quality healthcare. Getting to that system won’t be the most comfortable process for some entrenched players,” he warned, but he said the opportunities are many, and exciting, and he added, “I exhort all of you to engage with us on the initiatives we’ve presented today, because the opportunities are [so great]. Change is necessary, change is coming,” he said, and asked the leaders gathered at the conference to be a part of that change.