Imagine a system where patients are in the driver’s seat, able to shop among providers who are empowered as navigators of patient decisions rather than paperwork; where payments reward outcomes, not box-checking; and where diseases are effectively prevented or cured long before they cause unnecessary suffering and cost. … Such a system is not only possible—it’s necessary to sustaining the quality of American healthcare and fulfilling the duty we have to American patients.
As Prepared for Delivery
Thank you, Ann [Greiner], for that introduction.
Good morning, everyone, and thank you so much for inviting me to address you here today.
I’m especially glad to be here because the Patient-Centered Primary Care Collaborative represents a really positive trend in our healthcare system: providers and payers coming together to think about how to transform the delivery of healthcare services.
Everybody has their own feelings about consolidation in healthcare, but at the very least, coming together for conferences like this one is the kind of merger we can all appreciate.
On each of the priorities I have set forth for HHS—value-based transformation, bringing down the high price of prescription drugs, reforming the individual market for health insurance, and combating the opioid crisis—the department knows we ought to collaborate with the private sector and look outside the four walls of government for solutions.
Looking at how to deliver better value from our entire healthcare system may be the most ambitious among these priorities. It will require more transformation of established practices than any other, and that means more collaboration with the entities that need to transform.
It is incredibly important that we find a way forward for change. I believe we owe the American people a better healthcare system and I know you all are here today because you agree.
President Trump has heard from so many Americans who are burdened by high healthcare costs—and he is intent on delivering them a better deal.
American seniors, even with the protection Medicare affords, spend 14 percent of their household budgets on healthcare. Amazingly, when you count employer contributions, the average American household spends $28,000 a year on healthcare. These numbers would be acceptable if we were getting amazing outcomes and all living to 100, but we’re not.
I am determined that this equation begins to change under President Trump, and that finally moving to a truly value-based healthcare system be one of the key achievements that we see in the next decade of American healthcare.
That’s why I have identified value-based transformation as a top priority. I have identified Adam Boehler, our director of the Center for Medicare and Medicaid Innovation, as our senior adviser overseeing this effort.
He has laid out four avenues for driving toward value, four Ps: making patients into empowered consumers; making providers into accountable navigators of the health system; paying for outcomes; and preventing disease before it occurs or progresses.
I want to address each of them in turn today—and highlight how all of them will have a role for providers who, like many of you, are eager for innovation.
First, let’s talk about patients as empowered consumers. In healthcare, there has sometimes been skepticism about whether patients really do want to shop.
I am the first to admit that it will require something of a cultural shift, but that shift is already occurring.
More and more seniors are now shopping for plans via Medicare Advantage. Most seniors now shop for Part D plans. Younger generations have more experience with HSAs, consumer-driven health plans, and convenient, lower-cost urgent care clinics. Eventually, like all of us, they will age into being our highest-cost patients—after years of getting used to being individual healthcare consumers.
But, to put it mildly, many parts of our healthcare system have not exactly been open to the idea of catering to consumer choice. For one, patients as consumers need transparent information about price and quality, and yet that is so rarely available.
Earlier this month, we announced a new proposal to require the disclosure of the list prices of drugs in TV ads.
This is one step toward a place where, I believe, you should know how much a drug costs, and how much it’s going to cost you, when your doctor prescribes it.
The same holds for healthcare services. Why shouldn’t patients be empowered with information to get an MRI in a physician’s office if it’s going to cost them less than if they received it at a hospital?
After all, services make up an even larger share of healthcare spending than drugs, and they also have the same kind of opaque pricing and huge spreads between list price and actual cost.
If you try to find out the price of a healthcare service, which I’m sure some of you have—even and maybe especially when you’re the secretary of health and human services, getting that price, and the real price you’re actually going to pay, can be like pulling teeth.
If we want to drive down the cost of care through patient empowerment and competition, that has to change.
CMS has already taken steps in this direction, like requiring hospitals to post their prices online, and we are going to continue exploring how we can provide patients with the information they need, when they need it.
But we recognize that patients are just one side of the relationship at the heart of healthcare, between doctor and patient. We need physicians—especially primary care providers—to be empowered, too.
We envision physicians and other providers being empowered not as gatekeepers, but as navigators of the health system.
We believe primary care providers can even begin to take full accountability for their patients, and in return, we can remove substantial burdens and allow them to focus on the delivery of care.
We envision a spectrum of risk: Different sizes and types of practices can take on different levels of risk. As many of you know, even smaller practices want to be, and can be, compensated based on their patients’ outcomes.
We want to incentivize that, with a spectrum of flexibility, too: The more risk you are willing to take on, the less we’re going to micromanage your work.
So before the end of this year, you will see new payment models coming forth from CMMI that will give primary care physicians more flexibility in how they care for their patients, while offering them significant rewards for successfully keeping them healthy and out of the hospital.
We also want to see where we can bring flexibility for all kinds of providers to coordinate. Our Deputy Secretary Eric Hargan is overseeing an effort to examine how four laws—the Stark Law, the Anti-Kickback Statute, HIPAA, and 42 CFR Part 2—may be impeding care coordination.
CMS has already launched and concluded a request for information on the Stark Law, and our Office of the Inspector General has done the same on the Anti-Kickback Statute.
This is not an ordinary regulatory-burden exercise.
We’re eager to reduce unnecessary paperwork for physicians, but this isn’t focused on that goal. Rather, we are focused on how current interpretations of these laws are preventing physicians, patients and others from working together to unlock value.
They may particularly be impeding the ability of providers without a common owner to work together—and we want to enable small-scale providers to collaborate as much as possible.
Another important reform for providers was finalized last week with our changes to the physician fee schedule.
For the first time in 20 years, we overhauled the way doctors are paid for evaluation and management visits, reducing the number of codes involved and simplifying their certification requirements.
Our final rule was informed significantly by the feedback we received on our draft rule, and everyone should look at the E&M process as emblematic of our commitment to change.
We’ll work with stakeholders, including those who may be concerned about disruption. We want to understand everyone’s perspective. When we say we’re going to do something, we’ll do it deliberatively but . . . we will do it.
Reducing paperwork requirements while rewarding risk is a piece of our broader vision for value: We don’t want to be overly prescriptive about how doctors deliver value. We are going to tell you the what that we want—better outcomes at a lower cost—but we’re not going to be overly specific about the how.
This is one of the key insights in how we want to approach the third P, payments. We want to pay for outcomes, not process. Let me give you an example of what that means.
I was recently visiting a relative who was in a rehab hospital. One of the nurses who was caring for my relative, knowing my job, mentioned to me all the regulations they’re subject to, like staffing ratios.
I have a sort of natural instinct about these things, so I started scratching my head, “What the devil do we have to do with telling healthcare facilities about precisely how to do their staffing?” I went to talk to [CMS] Administrator [Seema] Verma about it, and she said, “Oh, we have lots to do with staffing."
Now, oversight of healthcare facilities is a responsibility we take incredibly seriously at HHS. It is really important.
But if you talk to any patient about what they want from healthcare, it’s outcomes, not process. Ultimately, that is what should drive providers, too.
The outcome that we want for my relative is that when he leaves that rehab hospital, he’ll be walking out the door, rather than leaving in a wheelchair.
It’s a pretty simple measure: You ought to get paid more if you get him back on his feet. That’s what value-based care means to me, what it means to a patient.
Imagine a system where physicians and other providers only had to worry about that outcome, rather than worrying about their staffing ratios and the individual reimbursements for every procedure they do and every drug they prescribe.
That kind of payment system would radically reorient power in our healthcare system—away from the federal government and back to those closest to the patient.
One way we can do that is through bundling payments, rather than paying for every individual service. This is an area where you have already seen testing from CMMI for several years now—and I want to let you know today that you are going to see a lot more such ideas in the future.
For instance, the Bundled Payments for Care Improvement model, or BPCI, showed significant savings in several common inpatient episodes, including joint replacement and pneumonia.
So we recently launched an advanced version of the model, which includes more than 1,000 participants that are receiving episode-based payments for over 30 clinical areas.
BPCI Advanced is a voluntary model, where potential participants can select whether they want to join. But we’re not going to stick to voluntary models.
Real experimentation with episodic bundles requires a willingness to try mandatory models. We know they are the most effective way to know whether these bundles can successfully save money and improve quality.
Last year, as many of you know, the administration reduced the size of the Comprehensive Care for Joint Replacement Model and pulled back the other episode payment models, including those on cardiac care, before they could launch.
We have now reexamined the role that models like these could play in value-based transformation.
I want to share with all of you for the first time today: We intend to revisit some of the episodic cardiac models that we pulled back, and are actively exploring new and improved episode-based models in other areas, including radiation oncology.
We’re also actively looking at ways to build on the lessons and successes of the Comprehensive Care for Joint Replacement model.
We’re not going to stop there: We will use all avenues available to us—including mandatory and voluntary episode-based payment models.
If you have any doubt about our ambitions in this area, consider the IPI model we introduced for Medicare Part B two weeks ago, a mandatory model that will help address the inequity between what the U.S. and other countries pay for many costly drugs.
As I have already mentioned today, we want to advance models like these in a collaborative manner. That has been a key priority for this administration since day one.
But there is nothing virtuous about maintaining outdated systems within Medicare fee-for-service—effectively a mandatory system for so long—when we know we could be exploring better alternatives.
We need results, American patients need change, and when we need mandatory models to deliver it, mandatory models are going to see a comeback.
A final place where patients and physicians can work together is preventing disease before it occurs or progresses.
I just discussed our plans for models like episodic bundles, but on prevention, we need to think a lot bigger than that.
Imagine a system where, through long-term payment models, providers actually see the financial rewards of helping their patients stay healthy—instead of being financially rewarded when they get sick.
This will involve a key role for primary care providers.
All of you involved with PCPCC should already be proud of the work done to create the patient-centered medical home model, which plays an important role today not just in many health systems but also in many HHS-supported programs, like community health centers.
Prevention starts with the patient, but physicians can play such a key role in informing their decision-making and behaviors. We look forward to supporting new arrangements that help stave off costly conditions and deadly diseases, and help everyone share in the savings that result.
All of you in this room have worked to develop and implement transformative ideas before. We are eager to learn from your experiences. We need the ideas, experience and dedication all of you have to build a new system that delivers Americans much better care at a much lower cost.
I want you all to imagine a system where patients are in the driver’s seat, able to shop among providers who are empowered as navigators of patient decisions rather than paperwork; where payments reward outcomes, not box-checking; and where diseases are effectively prevented or cured long before they cause unnecessary suffering and cost.
Doesn’t that sound like a system that you would like to work in—and one that every American would like to use?
Such a system is not only possible—it’s necessary to sustaining the quality of American healthcare and fulfilling the duty we have to American patients.
With all of your help, we will build such a system—sooner than many expect. Thank you for having me here today.