Alex M. Azar II
Better Medicare Alliance
Better health is the fundamental goal of the vision President Trump has for our healthcare system. He understands the vital importance that health holds for every American. He has a particular vision for healthcare: a system with affordable, personalized care, a system that puts you in control, provides peace of mind, and treats you like a human being, not a number.
As Prepared for Delivery
Thank you for that introduction, Congresswoman [Allyson Schwartz]. Good morning, everyone, and thank you so much for having me here today.
I’m excited to be here because all of you are here to collaborate on an important topic: how to use Medicare Advantage to improve the health and well-being of its beneficiaries.
The broad perspectives you all bring to the table speak to an important, sometimes neglected way to think about our health system. The ultimate goal of our work is not just improving health insurance or healthcare delivery, but improving health.
Better health is the fundamental goal of the vision President Trump has for our healthcare system. He understands the vital importance that health holds for every American.
He has a particular vision for healthcare: a system with affordable, personalized care, a system that puts you in control, provides peace of mind, and treats you like a human being, not a number.
Such a system will provide you with the affordability you need, the options and control you want, and the quality you deserve.
Delivering those results requires taking account of our system today. We have about 60 million Americans in traditional Medicare or Medicare Advantage, and 180 million Americans in the employer-sponsored market. About 70 million Americans are covered by Medicaid, approximately 10 million Americans are on the Affordable Care Act exchanges, and about 29 million remain uninsured.
One of those numbers leaps out: Americans covered by the ACA exchanges represent about 3 percent of our system. Many of them have suffered greatly, and we need to improve their experience—but healthcare is much more than just Obamacare. The world is bigger than the debate over the Affordable Care Act.
In looking at the whole system, it’s clear that many Americans are happy with what they have. Satisfaction ratings for Medicare, MA, and employer-sponsored insurance are quite high.
But Americans also see flaws in our system—and they worry about what would happen to them or a relative if they became uninsured or need the individual insurance market.
The key to building a better system at all levels, then, and the promise of President Trump, is to protect what works in our system and fix what’s broken.
For all 330 million Americans: We will protect what works and fix what’s broken.
There are three cross-cutting platforms where this administration is working to deliver on this, regardless of how their healthcare is financed: reforming the financing of care, deriving better value from that care, and improving health in specific, impactable areas.
I’ll explain how we’re working on each of them in turn.
I. Reforming Financing
When it comes to financing, protecting what works and fixing what’s broken means protecting Medicare and private insurance, improving those programs, and fixing the failures of the Affordable Care Act.
President Trump has been very clear: We will always protect Americans with preexisting conditions—a guarantee we will maintain at the federal level.
Within the ACA, we’ve kept that protection while opening up new, affordable options for Americans who buy their own insurance: affordable short-term insurance, association health plans that let individuals and small businesses band together, and health reimbursement arrangements that provide workers with new choices.
We’ve also worked with states and the private sector to finally stabilize exchange premiums and bring more insurers back into the individual market. We look forward to a day when Congress is willing to work with us to replace Obamacare for good, with affordability, options and control, and quality as the guiding principles.
What would it look like to keep what works and fix what’s broken throughout the rest of our financing system? Take the 60 million seniors who are on Medicare, and look at how they’re voting with their feet.
Every year, more and more seniors are choosing Medicare Advantage over traditional Medicare, enjoying the additional out-of-pocket protection and supplemental benefits MA offers. That is a credit to the hard work and creativity of many of you in this room.
Yet some are proposing to expand the traditional Medicare program to cover all Americans, no matter their age, income, or circumstances. This is not only ignoring the lessons of our programs as they stand today—it is also a path to undermining Medicare’s promise and delivering fiscal ruin, doubling Americans’ tax bills and increasing the size of the federal government by more than half.
Let me be clear: For the 180 million Americans with employer insurance and the 60 million seniors with Medicare, President Trump will protect what you have and make it better.
A total government takeover would bring these twin pillars of our healthcare system crumbling down, and President Trump will never let that happen.
But such reckless ideas are an attempt to respond to a real need. Americans want and deserve a solid healthcare safety net. The President recognizes that, he believes in it, and he knows Americans need financial peace of mind. No American should ever lose his or her house because of their healthcare bills. But we have to provide that protection in a fiscally sustainable way—which is not the status quo for Medicaid or the Affordable Care Act.
II. Delivering Value
Delivering financial protection in a fiscally sustainable way gets a lot easier if we look not just at insurance, as the Obamacare debate has often myopically focused, but also value in care delivery.
I’ll mention five ways we’re working to deliver better value, which I laid out right after starting at HHS: transparency around price and quality; advancing patient-centered health IT; reforming regulations, especially those that impede care coordination; moving from paying for procedures to paying for outcomes; and lowering prescription drug costs.
Start with transparency. Most of you in this room work in healthcare, and yet I bet most of you have, at some point, been shocked by the bill you got for a healthcare procedure.
A few years ago, when my doctor recommended I get a routine heart test, the hospital where I was sent told me the list price would be $5,500—when it turned out I could pay $550 for it at an outpatient clinic.
Making this information available to patients easily and immediately, before they ever have to make a healthcare decision, is the goal of the transparency executive order the President signed last month.
Under the EO, hospitals would have to disclose information about their negotiated rates in a public format that is understandable and usable for patients. Insurance companies will be required to provide patients with information about out-of-pocket costs before they receive services, rather than weeks later when they get the bill. Surprise bills will be a thing of the past.
Health IT and Data
Another element of the President’s executive order calls for an unprecedented unleashing of all federal healthcare data, analytics, and information for the use of innovators and researchers, while maintaining all necessary protections for privacy and security.
Getting the full benefit of big data in healthcare requires tackling the segmented nature of our health IT systems—which are often a burden on patients, too.
How many of you have had appointments at the doctor drawn out just because, seemingly every specialist you see, you have to relay all of your information, all over again?
That’s going to change. It’s possible to provide a nearly seamless experience, if we put control of your own data in your hands, as the patient, as we’ve proposed to do through our interoperability rule.
One of the downsides to this balkanized health IT system is how time-consuming it can be to go from doctor to doctor. But the barriers to effective coordination among providers are much steeper than just excessive paperwork.
In many cases, it doesn’t matter how much paperwork doctors are willing to put up with. Coordinating care and sharing risk for outcomes among providers simply isn’t allowed under the current interpretations of some statutes. Addressing these regulations that impede care coordination are part of a much broader regulatory reform effort at HHS. In Fiscal Year 2018, HHS accounted for more than half of the administration’s deregulatory savings, clocking in at more than $12 billion, with five deregulatory actions for every one new regulatory action.
Last year, I had Deputy Secretary Eric Hargan launch a regulatory sprint on examining barriers to coordinated care, which is getting very close to proposing new rules that will free up opportunities for information sharing, care coordination, and value creation.
The goal of reforming these regulations is to put the patient back at the center of healthcare. Sometimes “patient-centered” can sound like a cliché, especially here in Washington. But the way we pay physicians today truly is not patient-centered. Instead, it’s procedure-centered, oriented around the Medicare physician fee schedule.
In such a system, physicians aren’t incentivized to help you stay healthy—they’re driven to order more procedures. I recently learned about an example of this from the work of Dr. Marty Makary, a surgeon and researcher at Johns Hopkins. In a book coming out this fall, he tells a story about how a cardiologist friend suggested he attend a health fair at a church outside of D.C., where he saw a particularly strange practice, which he then saw at another health fair, and then many others.
Health professionals were meeting with older patients, doing tests, and asking them if they had any leg pain. If they had leg pain, the doctor would suggest, this might be a symptom of narrowing of the arteries—and that can be easily fixed, they were told, with a stent or balloon.
Makary was shocked to see this, because these surgeries aren’t necessary as a preventive measure—clinical best practices generally don’t even recommend screening for the condition they address.
Trusting in the healthcare system, patients were signing up for unnecessary procedures, costing Medicare, and sometimes their own pocketbooks, thousands and thousands of dollars.
There’s a better way—a system where the profitable path for physicians isn’t more procedures, but better health for their patients.
That’s the thinking behind the new primary care models we introduced earlier this year, which will enroll up to a quarter of Medicare enrollees in arrangements where their physician or a larger provider organization takes on some level of risk for their healthcare costs.
A senior enrolled in that kind of arrangement would have a physician dedicated to determining what she needs to stay healthy—someone who can act as her guide through the health system. She can have a sense of ease, knowing her doctor has the incentive for recommending the right preventive measures, and an incentive against running excessive tests or unnecessary procedures.
We can also enhance value through payments in Medicare Advantage, where we want to open up more opportunities for MA plans and entities they work with, including creative value-based insurance design arrangements, moving care to the home and community, and new ways for MA plans to improve a patients’ health over the long term.
The final area for better value I want to mention is lowering prescription drug costs. High drug costs are not just a drain on seniors’ budgets. By reducing adherence, they can often have serious impacts on health. That is why the President has laid out a vision for reducing costs through more competition, better negotiation, incentives for lower list prices, and lower out-of-pocket costs.
The inflation index for prescription drugs for the past 12 months dropped to a new historic low in June, and we’ll continue working on every lever, from importation to reference pricing, that can lower costs while improving patients’ health and protecting safety.
III. Improving Health
As I mentioned, these transformations to financing and delivery of care are focused on one goal: better health. That’s why, as part of our healthcare vision, the President and his administration have also identified a number of actionable, impactable public health challenges we face.
Take the HIV epidemic. The U.S. government spends more than $20 billion per year fighting this preventable, treatable disease, and 40,000 new infectious occur each year. But we can tackle this problem: Half of those new infectious occur in just 48 counties, plus D.C. and San Juan, Puerto Rico. In his State of the Union address this year, the President launched a plan to use the tools we have today to end the HIV epidemic in America within ten years, starting with targeted application of these tools in those specific geographic areas.
Another concerning issue is maternal mortality and morbidity: The U.S. has the highest maternal mortality rate in the developed world, an issue that particularly affects low-income and minority communities, and well over half of these deaths were completely preventable. We need to protect our mothers, and that starts by developing a comprehensive strategy that improves payment incentives, boosts adoption of best practices, and addresses preventable risks.
Maternal health is just one of many acute health challenges in rural America, which is another focus. Rural access to care can be a huge challenge: there are 263 specialists for every 100,000 Americans in urban areas, compared with just 30 per 100,000 in rural areas. But we believe we can design new ways to sustainably finance care in these areas, supporting innovation and providing flexibility to meet these communities’ health needs.
One public health challenge where we’re beginning to see results is the opioid epidemic. Just last week, the CDC released provisional data showing that the number of drug overdose deaths in the U.S. declined by 5.1 percent from 2017 to 2018. This is a credit to the work of communities and state and local governments across America, whom we’ve been supporting through the comprehensive, science-based strategy we launched under President Trump. We’re certainly not declaring victory, but we know that we’re making progress. When we work together, these public health challenges are beatable.
One of the largest single most expensive conditions in American healthcare is kidney disease, with kidney patients accounting for 1 in 5 dollars spent by the Medicare program. Despite that, the executive order President Trump signed to transform kidney care earlier this month was the first major action by a President on the issue in almost 50 years—since Medicare started covering patients with end-stage renal disease.
I know the need for improvement here personally because my father had end-stage renal disease. We were lucky that he was able to shift from center-based dialysis to at-home dialysis, and then eventually benefit from a transplant by a generous living donor.
At the EO signing, I was talking with a young woman, who did in-center dialysis before receiving a transplant, about how draining in-center dialysis was for my father. As we were talking, she started crying. I asked her if her tears were happy tears or sad tears.
She said, when I mentioned the rigors of the treatment my father faced, it brought back such painful memories of what she had to go through on dialysis and how thankful she was to have a transplant.
This young woman was brought to tears just remembering a healthcare procedure that hundreds of thousands of Americans undergo multiple times a week—even though there are better options.
The kidney health initiative President Trump launched this month is going to deliver American patients those better options—it’s going to put them in control.
We’re going to test out paying nephrologists for successfully slowing the progression of kidney disease, and we’re going to incentivize providing dialysis in the home. We’ll pay dialysis providers a bonus when patients end up receiving transplants. We’re also going to dramatically expand the supply of kidneys for transplant, by reforming how transplantable kidneys are identified and expanding support for living donors.
The final health area I want to mention is one many of you know well: addressing non-health risk factors, often called social determinants of health, that can drive so much of our health spending. Our system can often be penny-wise and pound-foolish, spending generously on healthcare without considering how health could be improved by addressing non-health needs.
You’ve already seen one effort to address this through new supplemental benefits in Medicare Advantage, like home-delivered meals, transportation, and home modifications. We want to go further, and we look forward to working with all of you to think about how best to do that.
So I want to close by focusing on why a system that thinks about patients not as numbers, but as people, with holistic needs—a system that puts the patient at the center—will improve health in ways large and small.
I saw a healthcare leader who works with a number of ACOs recently boast about an idea they had during the recent heatwave. This last week was a rare time of the year when spending all day in an air-conditioned hotel ballroom might have sounded quite appealing.
In one area hit by the heatwave, a physicians’ practice was having doctors and nurses call their patients with COPD and congestive heart failure, reminding them of the risk of exhaustion if they spent too much time outside in this heat and letting them know they’d be better off staying inside with air conditioning.
Think about how that links all the issues I mentioned today: That’s what it looks like to have a financing system that aims at better health, a system focused on high-value care, and a system that addresses major, preventable health challenges.
That phone call might sound like a small thing—but it’s a very big deal to the patient who avoids a life-threatening case of exhaustion or a trip to the ER.
That’s what you get from a system that treats you like a person, not a number, that’s personalized, affordable, and patient-centric.
That’s the vision; the steps I laid out today are how you get there.
Putting all Americans into one government-run healthcare system will not deliver that vision. We have some exceptionally talented people working on Medicare, but even they are never going to be able to devise a payment code for “calling your patient about staying inside during the heatwave”—nor should they.
The transformed system I’ve described will naturally incentivize care that treats you like a human being, not a number—and that’s what President Trump wants to ensure American patients receive.
The President is determined to protect what’s working and fix what’s broken—leaving a legacy of better healthcare and better health for all 330 million Americans. In fact, I am confident that, during President Trump’s time in office, the average American patient’s experience of healthcare, however they finance their care, will see much more meaningful change and improvement than it has in the past decade or more.
Through this transformation agenda, we will deliver American patients the affordability they need, the options and control they want, the quality they deserve—and most important, the better health we all want for every American.
Thank you so much for having me here today.