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.”
As I noted, that was a rather surprising answer to that question, in that context. So, for those who were hoping that Azar’s tenure might push health system reform forward a bit faster, that exchange in his Senate Finance Committee hearing, might well be seen as a positive note.
Meanwhile, in a November 14 article in Becker’s Health IT & CIO Review, Julie Spitzer wrote that there are “seven implications the nomination has for health IT,” speaking of Azar’s nomination. Among them, Azar “helped establish the ONC [Office of the National Coordinator for Health IT] while he served as general counsel at HHS during the Bush administration.” Meanwhile, David Brailer, M.D., the first National Coordinator, was quoted as telling POLITICO’s “Morning eHealth” newsletter that Azar had been “an unflinching supporter of health IT...He immediately got what we were doing, why it was important.”
Another implication, Spitzer wrote, was this: “According to Jodi Daniel, HHS' first senior health IT counsel and ONC's policy director, ‘[Mr. Azar] addressed the need for coordinated legal strategy across HHS to promote adoption of health IT and related efforts such as ePrescribing and standards for digital health information. As deputy secretary, he had responsibility for establishing ONC pursuant to the executive order,’” according to an interview she gave to POLITICO’s Morning eHealth newsletter. Spitzer also quoted Susan DeVore, CEO of the Charlotte-based Premier Inc., as saying in a statement that Mr. Azar "appreciates the need to have access to healthcare data and interoperability of health information systems."
So while there’s not a huge paper trail to refer to when evaluating the potential trajectory of Alex Azar’s tenure at HHS, we do have a few clues, per all of the above.
Meanwhile, we are left with several key questions, among them:
> On a fundamental level, how will Azar be looking at the healthcare industry and its component segments—the provider segment (hospitals, physicians and physician groups, integrated health systems, and all of the post-acute care types of organizations), the payer segment (health insurers), the purchaser segment (which of course includes his own department; both the public and private purchasers—governments and employers—of healthcare), and other segments, including pharmaceuticals, pharmacy benefit management companies, and the like?
> And within that landscape, will Azar be looking at the opportunities to move the industry forward, from more of a politically conservative, free-market-oriented perspective, or from more of a progressive, interventionist perspective, or some middle-way perspective? He is a Republican working for a Republican administration, but there are hints that he may bring a more nuanced approach to the position than Dr. Price did.
> More specifically, how will internal healthcare system reform evolve forward under Azar? He might take a very hands-off approach to the broad set of issues, leaving much of the operational decisions to Seema Verma at CMS. On the other hand, he might as easily take a more interventionist approach, particularly if he believes in actively pushing cost control.
> Within the context of internal health system reform, to what extent might Azar choose to push forward accountable care development, the value-based payment system under Medicare, and readmissions reduction penalties/incentives?
> When it comes to healthcare IT, Azar, who helped assist in the birthing of the ONC, has many options at hand. It’s anybody’s guess as to how interventionist he will be when it comes to federal healthcare IT policy.
> And, when it comes to the “conclusion” of the meaningful use process—everyone’s still wondering exactly what will happen in that regard.
It is particularly fascinating to speculate on certain specific aspects of how Azar might help shape federal healthcare IT policy. For example, as a former senior executive in the pharmaceutical industry, he worked very hard to avert federal government intervention in drug pricing. But how will he shape the relationships between CMS and ONC with healthcare IT vendors? Some in the industry believe that the industry needs firm leadership from HHS and its component agencies, around issues of interoperability—that, to be explicit, IT vendors need for the federal government to weigh in heavily on interoperability and strongly guide vendors forward in that area. Again, we’ll have to see what happens.
Frankly, I could see Azar going in either direction. On the one hand, in the wake of the early stages of meaningful use, many in the healthcare IT industry have expressed the general sentiment that federal healthcare officials need to let providers and vendors essentially sort things out themselves. On the other hand, some in the industry—including some vendor executives—are asking HHS/CMS/ONC officials to be far more prescriptive in how they want issues like interoperability to be resolved; there is a real impatience in some sectors with the idea of allowing the path forward on interoperability to remain vague and muddled at the federal healthcare IT policy level.
The bottom line in all this is that no one really knows exactly how Alex Azar’s tenure as HHS Secretary will evolve forward, either around internal healthcare system reform issues, or around federal healthcare IT policy issues. But what is clear is that now can genuinely be seen as an inflection point around both sets of issues at HHS. And the next moves will be Azar’s. Stay tuned!