What Might Alex Azar’s Tenure at HHS Bring to Health System Reform and Healthcare IT Policy? | Mark Hagland | Healthcare Blogs Skip to content Skip to navigation

What Might Alex Azar’s Tenure at HHS Bring to Health System Reform and Healthcare IT Policy?

January 25, 2018
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Alex Azar faces a raft of choices to sort through around health system reform and federal healthcare IT policy issues

When the U.S. Senate confirmed President Trump’s choice for his second Health and Human Services Secretary on Wednesday, it ushered in a new era at the Department of Health and Human Services (HHS). Alex Azar, a relative unknown in federal healthcare policy circles, is best known for serving as president of Lilly USA, the American division of the Indianapolis-based Eli Lily and Company, from January 2012 through January 2017; he had been at Lilly since June 2007, when he joined the pharmaceutical company as its top lobbyist and as its senior vice president of corporate affairs and communications.

In fact, this is not the first time Azar has worked at HHS; he served as the departments General Counsel from August 2001 through July 2005, and then in July 2005, he was confirmed by the Senate to become Deputy Secretary of health and Human Services, under Secretary Mike Leavitt, serving in that role until January 2007, when he went over to Lilly. As Deputy Secretary, Azar oversaw daily operations at the agency, whose budget is $1 trillion a year, and which encompasses more than 79,000 employees.

Meanwhile, the vast bulk of attention, during his confirmation hearings last month, focused on drug pricing, with Azar finding himself on the hot seat over issues of what many in the U.S. perceive to be exorbitant, out-of-control pharmaceutical prices. Certainly, as the senior federal official with the most power to impact drug pricing policy, Azar was not spared rigorous questioning on that subject.

But the broader question is, where might Azar take HHS, policy-wise, in terms of ongoing health system reform, as well as, of course, federal healthcare IT policy, with regard to the interests of healthcare IT leaders?

A focus on cost control?

A November 13 profile in USA Today might offer some insight in that regard. According to USA Today’s Maureen Groppe, “When Alex Azar had to rush his three-year-old son to the emergency room for a cut near his eye in 2006, the attending physician asked Azar if he wanted a plastic surgeon called in. ‘How much more will that cost?’ Azar asked, only to be looked at ‘as if I were from Mars.’ Azar wasn’t trying to have his son treated on the cheap,” Groppe reported; “he just wondered whether in this case a specialist could do anything more for him than the attending physician.”

What’s more, the USA Today profile noted, “It turned out that the stitches his son received from the plastic surgeon were exactly the same as what the attending physician would have done—but at a much higher cost. ‘It’s absurd to me that one of the largest segments of our economy is organized and operates in such a way that consumers have no real ability to learn about price or quality,’ Azar said in a speech when he was the No. 2 official at the U.S. Department of Health and Human Services during the George W. Bush administration,” Groppe wrote.

“If Azar is confirmed, he is likely to resume his focus on the cost of health care—and how to get more value out of the system—which captured his attention both during his past stint at HHS and while a top executive at Eli Lilly, the Indianapolis-based pharmaceutical giant,” Groppe wrote. And she quoted Mary Grealy, head of the Health Care Leadership Council, a free-market-focused advocacy group, as stating that “I’m just absolutely sure that he would continue to drive that.”

Alex Azar testifying before the Senate Finance Committee in January

Reading the tea leaves

Any speculation around what kind of HHS Secretary Azar will prove to be, is complicated by the fact that he lacks the very public record of statements and policy positions that Tom Price, his predecessor, had brought to the job when he was nominated. Price, who had practiced for many years as an orthopedic surgeon, then went on to represent Georgia’s sixth congressional district, from 2005 to 2017. During that time, Price was outspoken in his convictions that physicians are oppressed by over-regulation. And when he became HHS Secretary, Price was very open about the fact that he was hoping to undo as many regulations as possible, especially around physician practice-related policies. Not surprisingly, Price was moving HHS and CMS (the Centers for Medicare and Medicaid Services) away from mandatory bundled payments.

Meanwhile, might Azar’s tenure mark a distinct break with Price’s, at least on the mandatory bundled payment front? On January 11, I noted in a blog a portion of the January 9 confirmation hearing, in which Senator Mark Warner (a Democratic senator from Virginia) had questioned Azar closely about bundled payments. “And I would hope,” Warner said, “that we would realize that some of those pilots may—and I know you might have a disagreement on this one—might include mandatory pilots, because, too often, those who are in the voluntary system, are the ones who have already been able to bring about efficiencies, and we need to force more [innovation] into the system.”

Azar’s response? “Senator, we actually don’t disagree there. I believe that we need to be able to test hypotheses, and if we have to test a hypothesis, I want to be a reliable partner, I want to be collaborative in doing this, I want to be transparent, and follow appropriate procedures; but if to test a hypothesis there around changing our healthcare system, it needs to be mandatory there as opposed to voluntary, then so be it.”