Although couched as an opportunity, the final words in a speech from the Department of Health and Human Services Secretary Alex Azar to the Federation of American Hospitals sound more like a wakeup call to healthcare providers.

“Change represents opportunity, and I exhort all of you to take advantage of the opportunities represented by what I’ve discussed today,” said Azar. “Because I assure you: change is possible, change is necessary and change is coming.”

Azar’s address zeroed in on the idea of value-based healthcare transforming the industry. He has bigger ideas beyond accountable care organizations and joint replacement bundles, which he indicated weren’t bold enough to truly bend the cost curve of care.

“Value-based transformation in particular is not a new passion for me,” said Azar, mentioning that it was a top priority when he worked under Mike Leavitt at HHS and also a priority of the Obama administration. “But there is no turning back to an unsustainable system that pays for procedures rather than value. In fact, the only option is to charge forward — for HHS to take bolder action, and for providers and payers to join with us.”

He outlined four areas of emphasis for HHS:

  • Giving consumers greater control over health information through interoperable and accessible health information technology (HIT)
  • 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

Empowering consumers through HIT

In the current system, old charts and scans are now electronic files rather than paper records, but the provider still controls access to the records to the patient and to other providers, Azar says.

Interoperability remains a vague concept at the patient level. However, connectivity roadmaps and frameworks such as the Sequoia Project’s Carequality initiative works to build networks and increase connectivity between care providers.

Increasing transparency, especially around pricing

Azar related a personal story about requiring an echocardio stress test from his doctor who is part of a large medical center. But rather than having the test done in the office, he was referred to another part of the building, where he discovered it would be done at the medical center for 10 times the price the doctor would charge.

According to Azar, the pricing of that care should be transparent, upfront and contain no hidden charges as Americans are bearing more of the cost of their care.

Experiment more with Medicare and Medicaid care and payment models

If anything, the innovation mandated by the Affordable Care Act didn’t go far enough to shake up healthcare delivery.

“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.

Fueling the move to value-based care

Encouraging competition may actually mean more government for a time, Azar points out, noting that this “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,” Azar said.

For those who still were wondering how the healthcare landscape was going to evolve under the current administration, Azar has made clear the priorities of HHS.