In 1993 when the Republicans joined force with many in the healthcare industry to defeat the plans for universal coverage put forth by the Clintons, I said somewhat facetiously to some colleagues and friends that we would not get universal coverage and healthcare equity until the Republicans decided that it was good for business. I was using Nixon and Kissinger’s opening of China as a reference point. Richard Nixon came to power stonewalling Communism in every conceivable way. The Nixon of the mid fifties would have been flabbergasted by the Nixon who went to China in 1972. That thought came to mind again when I heard the speech that Alex Azar, the Secretary of HHS recently gave to a meeting of the Federation of American Hospitals in Washington.
The Federation of American Hospitals is a trade group, essentially a lobbying organization, representing more than a thousand “investor owned” hospitals. The CEO of FAH is the famous Chip Khan, who is generally credited for producing the “Harry and Louise” television crusade that sank the Clintons’ healthcare initiative back in 1993. I have watched the speech which begins about 15 minutes into the video and read the transcript. Azar followed his prepared remarks almost verbatim.
Azar began by assuring his audience of the president’s commitment to the private sector part of the Public/Private Partnership.
One of the key commitments President Trump has made across this administration has been to see the private sector as our partners, not as just entities to be regulated or overseen.
He referenced all the accomplishments in the practice of medicine over the ten years he was away from HHS but observed:
But innovation in payment and delivery systems is simply not proceeding at the same pace…here we are today — more than a decade later — and value-based payment is still far from reaching its potential….On top of that, of course, the current trajectories in health spending are both unsustainable and unmatched by increases in quality...For over a decade, we have been on a journey to replace that equation with a new one — paying for outcomes and wellness — but that transition needs to accelerate dramatically.
At this point I am asking myself if he found an old speech of Don Berwick’s in a draw at HHS. He wants a future where healthcare “functions the way other parts of our economy do.” He disagreed with the idea that healthcare was “different.”
- Patients would pick providers with the level of information we have when using Amazon or Yelp.
- Consumers would drive quality and cost-effectiveness with information, competition and genuine choice.
He sees “Value-based transformation” of our entire healthcare system as one of the top four priorities for his department.
The four priorities are:
- “Value-based transformation”
- Combating the opioid crisis
- Bringing down the high price of prescription drugs
- Addressing the cost and availability of insurance, especially in the individual market.
Next he made a promise about the pace of the changes to come:
... “Value-based transformation” has been a frustrating process: Providers have been understandably reluctant to charge into a completely new payment paradigm…This administration and this President are not interested in incremental steps. We are unafraid of disrupting existing arrangements simply because they’re backed by powerful special interests.
Here is the four step plan of action:
- Give consumers greater control over health information through interoperable and accessible health information technology
- Encourage transparency from providers and payers
- Use experimental models in Medicare and Medicaid to drive value and quality throughout the entire system
- Remove government burdens that impede this value-based transformation.
Perhaps someone has shown him the papers that President Obama wrote in JAMA and in The New England Journal of Medicine in 2015 and 2016 suggesting how the ACA could be improved based on the experience of its first years.
The next statement definitely is a business twist on Ideas going back to Crossing the Quality Chasm.
The key theme uniting these four priorities is the recognition that value is…best determined by a marketplace of many players — in the case of healthcare, patients and, where necessary, their third-party payers…But I want to emphasize that this will not necessarily make the process easier, and certainly not more painless. Putting the healthcare consumer in charge, letting them determine value, is a radical reorientation from the way that American healthcare has worked for the past century.
That last sentence is a restatement of the IHI concept of asking patients “what matters to them” as the next step up from “patient centered.”
He predicts “disruption.”
..the status quo is far from a competitive free market in the economic sense of the term, and healthcare is such a complex system, that facilitating a competitive, value-based marketplace is going to be disruptive to existing actors.
He announced that changes in health IT will be foundational. Interoperability and the patient’s control of all the medical data is a priority.
—unless we put this technology in the hands of patients themselves, the real benefits will never arrive.
He wants the patient record to be used as easily as Open Table.
Patients ought to have control of their records in a useful format, period….Putting patients in charge of this information is a key priority. But if we’re talking about trying to drive not just better outcomes, but lower costs, we also have to do a better job of informing patients about those costs.
He told a story about how his doctor ordered a test to be done in the hospital. It was going to cost $5,500. He worked through all of the issues and found that as an outpatient the test was available at $550. He then asked the key question that raised my hopes and won me over until he does something to prove that he was just “faking it.”
Now, there I was, the former deputy secretary of Health and Human Services, and that is the kind of effort it took to find out how much I would owe for a procedure. What if I had been a grandmother? Or a 20-something with a high-deductible plan?
This is simply wrong. It cannot continue if, as most people in America agree, we want some degree of a consumer market when it comes to healthcare.
…if we want to move to a system where we put patients more in charge of their own healthcare dollars, providers and insurers have to become more transparent about their pricing. There is no more powerful force than an informed consumer.
…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. And if that doesn’t happen, we have plenty of levers to pull that would help drive this change.
He is throwing down the gauntlet. He is serving notice. This may be real. He must think that he holds the cards to make things happen.”
He then got into the “how.” HHS will use their control of Medicare and Medicaid to drive changes in the commercial market.
The third piece we’re looking at is using Medicare and Medicaid to drive the value-based transformation of our entire health system.
Federal spending on Medicare and Medicaid amounted to just over $1 trillion in 2016…If we’re serious about transforming our health system toward paying for value, Medicare and Medicaid will play a key role. Only Medicare and Medicaid have the heft, the market concentration, to drive this kind of change, to be a first mover.
… as we all know, commercial payers mimic the fee-for-service payment systems that come out of Medicare. If we don’t change those, nothing will change.
Since MACRA was passed I have been saying to anyone who will listen that fee for service will end.
We already have a range of tools for using these programs to pay for value, many created by 2015’s MACRA legislation. The Center for Medicare and Medicaid Innovation, alongside these tools, vests HHS with tremendous power to experiment with new payment models.
…make no mistake: we will use these tools to drive real change in our system.
Simply put, I don’t intend to spend the next several years tinkering with how to build the very best joint-replacement bundle — we want to look at bold measures that will fundamentally reorient how Medicare and Medicaid pay for care and create a true competitive playing field where value is rewarded handsomely.
He implied that risk will be demanded of providers. There will apparently be no more shared savings without vulnerability to cost overruns. His plan acknowledged the burden of reporting many metrics and restrictive impediments to innovation that many federal regulations foster.
As a matter of principle, we want to move to a system where we can be agnostic about ownership structures, a system that will allow independent providers to group together to drive innovation, quality, and competition.
This brings me to our fourth key engine for transformation: addressing any government burdens that may be getting in the way of integrated, collaborative, and holistic care for the patient, and of structures that may create new value more generally.
He reported that the aggressive change process he is announcing will be driven by the president’s empathy for “working class Americans.”
I want to end by laying out why I’m so optimistic that we can tackle these longstanding priorities under this administration. First, the time has simply come — as costs continue to skyrocket, the current system simply cannot last.
But it is also because this administration is unafraid of disruption in the way many political actors are. President Trump is a man of courage and vision. He has seen and heard how the high cost of healthcare is burdening working-class Americans, and he has given us a mandate to do something about it.
Does the president’s purported concern for “working class Americans” spill over to include all Americans? What about very the young, the old, and the poor? Does Azar read the quote from Hubert Humphrey that is carved on the wall of the looby near the elevator to his office?
It was once said that the moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in the shadows of life, the sick, the needy and the handicapped.
I would have loved him to confirm that sentiment, but I am willing to watch open mindedly as he makes his effort. He has an aggressive agenda and he ended with a big dollop of reality balanced by a threat.
This won’t be the most comfortable process for many entrenched players. 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.
I am determined that we will look back at the years of this administration as an inflection point in the journey toward value-based care. We want you to join on this journey…
Change represents opportunity, and I exhort all of you to take advantage of the opportunities represented by what I’ve discussed today. Because I assure you: Change is possible, change is necessary, and change is coming.
Are you ready, or will the change of pace Secretary Azar describes and says is coming soon leave you, your colleagues, your practice, your hospital, your health system “dazed and confused?” Secretary Azar seems to have taken a page from my old coach who loved to say, “Lead, follow, or get out of the way.” Indeed, change may be coming. Should I remind you of how the world changed after Nixon’s trip to China?
