- HHS Secretary Alex Azar pledged at the Federation of American Hospitals' conference Monday that the department is committed to transitioning to a value-based care system, saying the government may need to intervene to an "uncomfortable degree" to incentivize change.
- Azar laid out four areas of emphasis for HHS: giving consumers greater control over their health data by improving interoperability; encouraging price transparency from both payers and providers; utilizing experimental models in Medicare and Medicaid; and removing "government burdens that impede this value-based transformation."
- "Some argue healthcare is simply different and is and should be immune from market forces," Azar said. "I simply disagree. Real competition — in the economic sense — has never really been fully tried in our bizarre third-party payer system."
Azar's remarks on the department's commitment to the transition to value-based care came during his first major public appearance to industry.
On pricing transparency, Azar pointed to the difficulty patients have in knowing the real costs of procedures and prescription drugs as a barrier to true market competition.
"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," Azar warned.
Azar also foreshadowed policy coming down the pipeline from CMS Administrator Seema Verma on EHRs. The secretary argued that doctors and hospitals have resisted giving up control of patient records or other healthcare information, saying patients, not the provider, should be in charge of the information.
"Patients ought to have control of their records in a useful format, period. When they arrive at a new provider, they should have a way of bringing their records, period. That’s interoperability. The what, not the how," Azar said.
The secretary alluded to a previous commitment from his confirmation hearing that HHS would not be afraid to use mandatory Center for Medicare and Medicaid Innovation pilots. Azar pledged the department would be transparent and collaborative, and would have appropriate guardrails in place, but said HHS would use CMMI and authority granted by MACRA legislation 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," Azar said.
Azar has more fully embraced aspects of value-based care than his predecessor Tom Price, who was forced out as HHS head after reports he used private jets for business travel. Azar has said he could support mandated bundled payment models if they are needed “to get adequate data.”
CMS worried value-based care proponents in November when it canceled mandatory hip fracture and cardiac bundled payment models and scaled back another bundle program. Those fears were eased earlier this year, however, when the agency went forward with the Bundled Payment for Care Improvement Advanced model.
Also Monday, Azar targeted what he characterized as government burdens that are getting in the way of value-based care. He pointed to Medicare and Medicaid price reporting rules and restrictions on FDA communication policies that he argued impedes pharmaceutical companies and payers efforts to work together.
FDA Commissioner Scott Gottlieb has previously argued that loosening restrictions on off-label communication would facilitate medical care for patients.
Azar also pointed to limitations on the amount of free ride-sharing trips that can be given to a patient in one year as one example of a policy that should be changed. Just in the past week, Uber and Lyft both launched new efforts to expand their healthcare platforms.
"Current interpretations of various well-meaning anti-fraud protections may actually be impeding useful coordination and integration of services," Azar said.
Taken together, Azar argued the four areas of focus by HHS to encourage a transition to value-based care will lead to downward pressure on costs and increase quality.