Leavitt's Four Pillars Are Now Azar's

Newtown, CT - January 26, 2018

When he headed up Health and Human Services, Mike Leavitt proposed a framework for a higher performing health care system. It was supported by four pillars – information on quality care that would be actionable by consumers; information on price of health care that would help providers, payers and consumers make better decisions; value-based payment models; and interoperable health information. One of his deputies was the new Secretary for Health and Human Services, Alex Azar, and this bodes well for those of us who believe that the combination of better models of paying for health care, transparency, consumer engagement and free-flowing health data has the potential to transform U.S. health care.

There is no silver bullet to solving a multi-trillion dollar problem, but there is a silver buckshot as our old friend Bruce Taylor used to say. Unfortunately, too many either choose to ignore the need for that multi-faceted approach or focus only on one or the other at any point in time. The hard part of what we do is to focus with equal intensity on multiple fronts and to not relax that intensity at any point in time. Unfortunately, the last Secretary of HHS did just that, and the new one has ground to make up.

The recent announcement by CMS to deploy the Bundled Payment for Care Improvement Advanced sends a good signal, despite concerns about the design of the program, but it’s not enough. The Physician-focused Payment Model Technical Advisory Committee has now recommended four models for testing by CMS and none has seen the light of day, and they must. The implementation of MACRA is in shambles, with hundreds of thousands of physicians exempt from participation, few advanced APMs for others to choose, and MIPS recommended for extinction by MedPAC. And yet MACRA is the expression of one of Mike Leavitt’s pillars. It was designed to move physicians from the prevailing fee-for-service system to alternative payment models. MIPS was designed to suck and on that front it’s pretty much mission accomplished, and that’s why it has to stay and has to apply to as many physicians as possible. After all, that was the deal the AMA made in exchange for jettisoning the Sustainable Growth Rate. How does the saying go: now that you’ve made your bed, lie in it? And while MIPS certainly feels like a bed of nails, no physician is forced to lie in it. With or without them, the program must do its part.

As for transparency, some of our recent research should alleviate the concerns of some that it’s just not that effective. Much like reports of new payment models not being effective, there’s an important footnote that many miss. The programs don’t work when they’re poorly designed, and they work very well otherwise. Here’s the upshot. If you provide a compelling set of choices combined with compelling visuals and data, the large majority of consumers make the logical trade-offs between price and quality. And as a consequence of ever increasing out-of-pocket expenses another long-held health care myth is now being slain. Our research shows that with a $400 price differential three quarters of consumer-patients would shift providers. Given the ample evidence of the effectiveness of reference-pricing, it’s not a surprise, but in this industry we often have to re-prove what has already been proven until those that live in the rarified air of the ivory towers start believing it. Of course, by then, the industry has changed. And it will, for the better, if the new Secretary of HHS sticks to the four pillars and continues to build on all the work done to-date by successive administrations. And maybe, finally, the yoke of crushingly expensive and mediocre quality health care will be lifted from the shoulders of the millions that suffer under it.