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MedHOK Strategic Insights Blog

HHS Secretary Endorses Value-Based Healthcare Transformation

Marc Ryan | March 11, 2018

03.07.2018_Teddy-Trump Blog.jpgWhen Donald Trump took office as President in January 2017, many (including this blogger nonetheless) predicted the end of (at least the intense threat to) a quiet transformation to value-based care. There was the following:

  • The intense dislike for government healthcare program expansions in general.
  • The attack on anything Obamacare.
  • The push by the GOP House to “reform” Medicaid by stripping it of the entitlement as well as applying a growth factor to the remake that would have spelled enormous trouble for state Medicaid budgets.
  • The Centers for Medicare and Medicaid Services (CMS) pursuing 1115 and other Medicaid waivers to rein in spending and introduce work requirements, cost-sharing, and other personal responsibility measures.
  • Tom Price’s hatred of bundled payments and related reforms in the Medicare and Medicaid fee-for-service environments.

The thought was that these moves would gut the value-based policy infrastructure, as well as the dollars necessary to facilitate transformation.

Even still, the emerging value-based healthcare transformation has survived the past year.

  • CMS has held firm on the compliance and quality infrastructure mandates for Medicare Advantage and Part D. There is no sign of slowdown here.
  • Surprisingly, the administration did not completely walk away from the Medicaid mega rule championed by the Obama administration. At least for now, they appear to be implementing the rule, which should bring much heavier compliance and quality performance to the program (although 1115 waivers could water down the effects).

Now, it looks like the new Health and Human Services (HHS) Secretary Alex Azar is explicitly endorsing the transformation goals. Say what???

In a speech before the Federation of American Hospitals, Azar noted, “…innovation in payment and delivery systems is simply not proceeding at the same pace…” as other reforms in government. He noted that back in the 2000s, “…shifting to a value-based system was just getting going as well. And yet here we are today — more than a decade later — and value-based payment is still far from reaching its potential.”  He declared that, “So this is no time to be timid. Today’s healthcare system is simply not delivering outcomes commensurate with its cost.”

As we too have often noted in this blog, Azar is concerned that chronic condition management is not done well in America. We indeed are a significant outlier compared to other developed nations. Azar noted that this and other inefficiencies in our system are driving “trajectories” in health spending that are “unsustainable and unmatched by increases in quality.” Azar endorsed accelerating the push for payment for outcomes and wellness. His dream state:

“Imagine a day when healthcare delivery in the United States functions the way other parts of our economy do. We, as 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.”

Azar announced that the four areas of focus will be:

  • Giving consumers greater control over health information through interoperable and accessible health information technology.
  • Encouraging transparency from providers and payers.
  • Using experimental models in Medicare and Medicaid to drive value and quality throughout the entire system.
  • Removing government burdens that impede this value-based transformation.

In tandem with the speech before the hospital group, CMS announced MyHealthEData, an initiative to empower patients by giving them control of their healthcare data. As with HIPAA, the vision is to have an American’s data follow them through their healthcare journey, with electronic access and control of health records from the device or application of their choice. CMS Administrator Seema Verma also announced the launch of Medicare’s Blue Button 2.0, a new and secure way for traditional Medicare program beneficiaries to access and share their personal health data in a universal digital format. 

All of this is meant to empower individuals to take a proactive stake in their healthcare, reduce duplication and waste, and ultimately bend the cost curve. Numerous public and private organizations have committed to integrating to utilize the system. It could help drive other efforts in the area of health information exchanges at the regional, state and national levels as well as interoperability through electronic health records. Verma has challenged insurers to mimic the program and ensure member access to health histories.

Azar and Verma understand that, as much as they are seemingly committed to transformation, the fragmented nature of the system will continue to inhibit change. Indeed, some of their proposals will do the same. However, this is one of the first signs that the Trump administration understands the crisis we have in healthcare. We hope this means that the administration and Congress are moving from short-term, political motives to rational and sustainable policy outlooks.

Where we remain concerned is in Azar’s view that the marketplace should determine change and not what he calls “arbitrary authorities or central planners.” We are as much fans of Adam  Smith’s invisible hand as anyone. We, too, think that human behavior and personal responsibility should play a great role in transformation. Last, as a college student, this blogger majored in the study of the pernicious effects (economically, politically and humanly) of Lenin, Stalin and the other Marxist central planners. But forgive us if we feel there is some reasonable role for government in the regulation and oversight of healthcare’s future. We are strong believers in the innovation of private healthcare delivery with a healthy dose (forgive the pun) of government regulation to ensure the system prioritizes quality over what could be the anti-patient extremes of an unfettered market. We perhaps long a bit for the days of Teddy Roosevelt’s trust-busting and progressive reforms. Look at the positive results – for committed plans, the government and members – of the compliance regime and Star program in Medicare Advantage and Part D.  It is a model worth building throughout our healthcare system.

But wait, surprisingly Azar did note in his speech:

“In fact, it will require some degree of federal intervention — perhaps even an uncomfortable degree. That may sound surprising coming from an administration that deeply believes in the power of markets and competition. But 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. Simply put, our current system may be working for many. But it’s not working for patients and it’s not working for the taxpayer.”

So, could 2018 be the year of Donald Trump as Teddy Roosevelt? A leap of faith perhaps, but Azar’s speech offers some hope.

CMS, Medicare Advantage, value based healthcare, Medicare Part D, Medicare Reform, Alex Azar, Donald Trump

About The Author

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs, and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel. Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management and administration.

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