Alex Azar, the new secretary of Health and Human Services, is hitting all the right notes, as he travels around the country spelling out his priorities for health care. Price transparency, value-based payments, easily shared medical records, hospital competition.
Best of all, he’s promising disruptive federal intervention to make things happen. As Avik Roy points out in Forbes, “one of the paradoxes of health economics [is] that . . . health care providers make more money if more people are sick.” Changing the landscape from paying for treatment of illness to paying for wellness won’t be easy.
Insurance hides health care costs
Complicating matters is the fact that, if you have decent insurance, you often don’t care about the price of your medical care. How often do we demand to know the price of our health care before we buy? Here’s Roy’s colorful analogy:
If you put me in front of a cash bar, I might buy a Bud Light. But if I’m at an open bar at an in-law’s wedding, don’t be surprised if I drink single-malt scotch all night.
So . . . it appears that the Health Secretary knows how to use the bully pulpit. That will certainly help in fostering transparency. But is that enough?
Some changes can be made without Congress
Unfortunately, he’ll need Congress’ help to make meaningful policy changes. I don’t see that happening anytime soon. But here are some things he can do on the regulatory front:
- Push to give patients control of their medical records—Streamline regulations that hamstring IT firms’ efforts to allow patients to manage their own medical records, perhaps on smartphones.
- Discourage further hospital consolidation—Modify Medicare regulations that encourage hospitals to buy up private practices, leading to higher prices. Partner with the Federal Trade Commission on reviews of hospital mergers, sharing information about how previous mergers have led to higher prices.
- Remove impediments to value-based care—Modify restrictions on efficient models of care like telemedicine. Fix the rigid coding and documentation problems that plague the industry’s efforts to measure performance.
Ultimately, Azar’s efforts will be counterbalanced by a horde of health care players and lobbyists favoring the status quo. But the time is right for someone at the top to talk loudly.
Let’s see what he can do.