HHS Secretary Azar Affirms Value-Based Care is the Future

Home health care providers were assured that value-based purchasing programs were going to continue—and likely accelerate—after Department of Health and Humans Services (HHS) Secretary Alex Azar reiterated his support for these payment models Tuesday.

Azar replaced former Secretary Tom Price, who was ousted from the role in September 2017 after an investigation into his use of private jets at taxpayer expense. Price had supported the aims of value-based care—namely, to tie Medicare reimbursement to quality and cost metrics. However, he opposed mandating that providers participate in value-based care programs that he said were unproven.

Mandatory programs have included Comprehensive Care for Joint Replacement (CJR), which has presented opportunities for home health providers that can provide efficient follow-up care for orthopedic patients. But some big names in the industry, including Louisville-based provider Kindred Healthcare (NYSE: KND), concurred with Price that the pace of change had gotten too rapid and mandatory programs were not wise.


In 2017, on Price’s watch, the Centers for Medicare & Medicaid Services (CMS) delayed some bundled payment initiatives, and called into question the pace of the health care system’s shift to value-based care.

However, Azar seemed to put those questions to rest.

Azar was clear that these ideas were high level, and the transformation would go beyond “tinkering” with a single program.


“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 in a speech to the Federation of American Hospitals.

Azar outlined four areas of emphasis: giving consumers greater control over their health information; encouraging transparency among providers and payers; using experimental models focused on value and quality; and removing government burdens that impede value-based transformation.

Within these ideas, Azar also pushed for a competitive free market and stated a value-based marketplace could be disruptive to existing actors in the system.

The secretary also singled out accountable care organizations (ACOs), calling the savings they have achieved so far “lackluster.”

“In retrospect, this is not much of a surprise: Providers were not given new meaningful space to experiment—such as the arrangements they needed to truly take on the risk of a patient’s outcomes,” Azar stated. “Meanwhile, they were allowed to share in modest cost savings, but not asked to accept responsibility for cost overruns.”

While not outlining any new specific programs, Azar stated “as costs continue to skyrocket, the current system simply cannot last.”

Written by Amy Baxter