Trump’s health chief warns hospital execs about health care costs: ‘Change is coming’

President Trump’s new health secretary issued a warning Monday to a room of hospital executives about soaring health care costs: change is coming, whether you like it or not.

Speaking at the Federation of American Hospitals convention in D.C., Health and Human Services (HHS) Secretary Alex Azar laid out a series of actions the administration will take that are aimed at lowering health care costs, and warned that it wouldn’t be deterred by powerful special interests.

“Today is an opportunity to let everyone know that we take these shifts seriously, and they’re going to happen — one way or another,” Azar said. “The administration and this president are not interested in incremental steps. We are unafraid of disrupting existing arrangements simply because they’re backed by powerful special interests.”

The admistration will make it easier for patients to access their health records, encourage health providers to be more transparent about costs of procedures and services and remove regulations that “impede” innovation. HHS will also “experiment” with payment models in Medicare and Medicaid to “drive value and quality,” he said.

“President Trump is a man of courage and vision. He has seen and heard how the high cost of health care is burdening working-class Americans, and he has given us a mandate to do something about it,” Azar said.

In encouraging providers to be more transparent about costs, Azar said patients have the right to know the price of a service before they get it.

“This is a pretty simple principle,” he said. “We’ll work with you to make it happen — and lay out more powerful incentives if it doesn’t.”

Azar said he wasn’t “singling out hospitals” but pharmacies and drug companies also need to become more transparent about pricing.

“If that doesn’t happen, we have plenty of levers to pull that would help drive this change,” he warned.

The administration also plans to “experiment” with new payment models in Medicaid and Medicare, noting that some plans operate under a “fee-for-service” structure, meaning services are charged separately.

Some argue this encourages providers to provide more, unnecessary services, thus driving up health care costs.

Azar noted that commercial insurers often mimic payment models under Medicare.

“If we don’t change those, nothing will change,” he said. “Only Medicare and Medicaid have the heft, the market concentration, to drive this kind of change, to be a first mover.”

While the federal government has been trying to move away from a fee-for-service structure for more than a decade, it has moved at a slow pace, in part because lobbyists have been reluctant to change.

“But there is no turning back to an unsustainable system that pays for procedures rather than value,” Azar said. “In fact, the only option is to charge forward — for HHS to take bolder action and for providers and payers to join with us.”

Azar said the administration would make an announcement Tuesday about actions it will take to “put patients in control of their health data.”

“Too often, doctors and hospitals have been resistant to giving up control of records, and make patients jump through hoops to get something as basic as an image of a CT scan,” he said. “The health-care consumer, not the provider, ought to be in charge of this information.”