HHS Tells Health Insurers To Get Ready For Radical Change

The Trump administration is committed to transforming the health care system into one that emphasizes value over marathon tests with hazy prices, while empowering consumers to find doctors and services the way they find restaurants on Yelp or Open Table, Health and Human Services Secretary Alex Azar told health insurers Thursday.

"This is no time to be timid. Today's health care system is simply not delivering outcomes commensurate with its cost — President Trump knows it, and the American people know it too," he said in prepared remarks before a policy conference held by America's Health Insurance Plans.

Mr. Azar said the administration is leveraging the ubiquity of smartphones with the launch of Blue Button 2.0, a tech initiative that urges app developers to design programs that let patients easily access and understand their health records and claims data.

Transparency is the second piece, he said, saying consumers should know how much procedures will cost before they receive them. He said he once confronted hospital employees over a cardio stress test that cost $5,500 in a hospital but $550 in a doctor's office.

"Imagine if you have to order before knowing what anything costs — indeed, before ever seeing the menu. And once your bill finally does arrive, not only are you paying for your appetizer, entree, and dessert — you get a surprise bill from the pastry chef, too — who turns out to be out of network," he said. "No one would ever put up with such a system."

He said this is a big problem in the prescription drug sector, though he applauded UnitedHealthcare for announcing it will pass drug manufacturer rebates it receives to customers to bring down costs.

Mr. Azar said the administration will prod the nation's public insurance programs — Medicare and Medicaid — to tie payments to quality, since spending on these programs totaled over $1 trillion in 2016, though it won't be heavy-handed.

"We are mindful that aggressive models have not always worked out, so appropriate guardrails will always be essential," he said. "But make no mistake: we will use these tools to drive real change in our system."

Mr. Azar characterized the push as a long-standing passion, dating back to his tenure in HHS under President George W. Bush.

The Obama administration emphasized quality over quantity in its own health care reforms, though Mr. Azar suggested Thursday that they put too many strictures on the private sector, making it unable to innovate.

Yet sweeping changes to how the health sector delivers care will require some degree of federal intervention, he acknowledged, "perhaps even an uncomfortable degree."

"That may sound surprising coming from an administration that deeply believes in the power of markets and competition," he said. "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."