HHS Secretary Alex Azar Gives Industry Leaders a Map of the New Healthcare

May 4, 2018
On Wednesday at the World Health Care Congress in Washington, D.C., HHS Secretary Alex Azar offered attendees a conceptual map of the new healthcare, at least from the standpoint of federal healthcare policy

It was quite fascinating to cover the speech that Health and Human Services Secretary Alex Azar gave this week in Washington, D.C. In a keynote address on Wednesday morning at the Marriott Wardman Park Hotel, Secretary Azar laid out his agency’s overall policy strategy, for attendees at the World Health Care Congress, which annually gathers together leaders from all the major sectors of the U.S. healthcare industry, from hospitals to physician groups to post-acute and behavioral healthcare, to health plans/health insurers, employer-purchasers, pharmaceutical leaders, and healthcare IT leaders. It’s an ideal venue for senior federal healthcare officials to make announcements—and they usually do show up every year, and sometimes, make news.

Indeed, this year, Seema Verma, Administrator of CMS (the Centers for Medicare and Medicaid Services) had addressed the Congress just two days earlier, on Monday. And while Verma’s and Azar’s speeches contained somewhat similar overall content, both the specifics, and especially, the tone, of the two speeches, differed, with Verma’s tone quite bracing and sharply partisan, while Azar’s was milder and friendlier by far. Where Verma veered strongly into the political realm, saying forcefully that “I take exception to the claims that we are trying to sabotage Obamacare; Obamacare was failing long before Donald Trump became president and I became CMS administrator,” referring to the Affordable Care Act (ACA) passed by Congress and signed into law by President Obama in March 2010, and emphasizing that, “Today, half the counties in America, and 10 states, have no health insurance choices,” Azar took a far more conciliatory tone, focusing on the opportunities for all the stakeholder groups in healthcare to come together.

Beyond the tonal difference, Secretary Azar offered something of a conceptual road map for his listeners, noting that, among the top priorities he would be focusing on in the near future, would be 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.

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.”

As Healthcare Informatics Managing Editor Rajiv Leventhal reported in an article on the new proposed rule for the Inpatient Prospective Payment System (IPPS) announced on April 24, “Regarding transparency, CMS noted that although hospitals are already required under guidelines developed by CMS to either make publicly available a list of their standard charges, or their policies for allowing the public to view a list of those charges upon request, CMS is updating its guidelines to specifically require that hospitals post this information. The agency is also seeking comment on what price transparency information stakeholders would find most useful and how best to help hospitals create patient-friendly interfaces to make it easier for consumers to access relevant health care data so they can more readily compare providers.”

What’s more, CMS had also announced on April 24 its intention to explore creating a direct contracting option for Medicare-participating physicians in practice, as Leventhal noted in a separate article published on that date. That article noted that CMS said on that day that “[T]he agency also said that it would be taking a next step to develop a potential model in direct provider contracting (DPC).” According to CMS, “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.” Per that, CMS has issued an RFI (request for information) on the DPC model that runs through May 25, and that follows up on the RFI that had generated many comments from providers interested in contracting directly with CMS in new payment arrangements.

And I haven’t yet even mentioned the changing of the meaningful use program to “Promoting Interoperability,” the MyHealthEData initiative, or elements around the use of certified electronic health record (EHR) technology; or Azar’s reaffirmation on Wednesday of comments he had made in the first week of March to two different industry conferences affirming his support for the expansion of bundled payment models under Medicare.

What struck me in particular in Secretary Azar’s speech on Wednesday was that, while he framed a lot of issues in the context of the free market (a phrase that both he and Verma used liberally in their speeches to the World Health Care Congress), the nurturing of new payment models and the endorsement of bundled payments, could easily have been expected of the top HHS and CMS officials in a Democratic, rather than a Republican, administration.

Then again, as both Verma and Azar pointed out, everyone assembled at the Marriott Wardman Park Hotel this week already knew that the cost trajectory of U.S. healthcare is becoming quite unsustainable, with, as the Medicare actuaries have pointed out, total U.S. healthcare spending expected to leap from $3.5 trillion in 2017 to $5.7 trillion in 2026—a 62.8-percent growth over nine years—and to go from consuming 17.9 percent to 19.7 percent, of our gross domestic product, during that time—an astonishing rate of growth in any context.

So really, any administration, whether Republican or Democratic, would be hard-pressed not to push ahead with payment reform, given the cost cliff our healthcare system is about to go over in the next decade.

In that sense, it was good for Azar to give us a map of the potential federal healthcare policy future for healthcare leaders to follow. He reaffirmed his interest in alternative payment models, focus on transparency and accountability for providers, and, yes, rearticulated his interest in interoperability, as a means to an end. His comments, though shared in a milder tone than those of Seema Verma two days earlier, pretty much reinforced what she had said: that the top HHS and CMS officials were going to push providers, health plans, and everyone else, forward into a new healthcare that is more transparent and accountable, better in control of costs, of higher documented quality, and more consumer- and patient-centric and -responsive.

That’s a pretty clear map to follow; and healthcare IT leaders now have the advantage that they can strategize forward along at least a few dimensions, as they facilitate change in their organizations, particularly around payment reform. HIT leaders need to move ahead with all alacrity, now, to lay the foundations for accountable care, in the broadest sense of the term. They need to optimize their EHRs, to vastly improve supports to clinician workflow, to implement enterprise-wide data warehouses, to connect those warehouses to top-notch data analytics platforms and processes, and to support physicians and their multidisciplinary care teams, with dashboards and every form of clinical decision support technology, in order to up their game on managing the care of high-risk and rising-risk patients with chronic illnesses.

It's going to be a massive lift for everyone; but at least we have a federal healthcare policy map for the next few years, and that is very helpful—and very important. And as the nationwide healthcare system cost pressures mount, so, too, will the administration’s efforts to force transformation on the healthcare system. So, don’t say no one warned you.

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