On June 13, the RJC was honored to welcome Health and Human Services Secretary Alex M. Azar II to our June 2019 Leadership meeting in Washington, DC. Here are Sec. Azar's remarks, as prepared for delivery.
Good afternoon, everyone, and thank you so much for inviting me here today.
I’m delighted to be with you all to provide an update on the American healthcare system, and what we’ve been doing at HHS to advance President Trump’s agenda.
What we do at HHS is important work for a number of reasons, one being the sheer size of the department. We employ 80,000 people, with a $1.3 trillion budget and more than 300 individual programs.
Standing alone, we’d be the sixth largest government on earth. That’s right: It’s the U.S., China, Japan, Germany, France, and then HHS. This is the one time I am happy to lose to the French.
But I’m not sure how much longer we’ll be losing to them.
As was mentioned, I worked at HHS under President Bush, too, and when I arrived at the department in 2001, our budget was one-fourth of what it is today, around $350 billion.
You might like the idea of helping to run an organization or business and returning to it when it’s four times the size it had been but I assure you, that is not how we look at the federal government.
HHS has a leading role on some of the President’s most important priorities. First of all, we exist to help Americans secure access to affordable, high-quality healthcare—a vitally important priority for this President. The way we want to do that is by facilitating markets, and keeping patients at the center of them.
Second, we exist to protect and enhance life. That means protecting our country from infectious diseases, helping Americans recover from addiction, addressing public health challenges like maternal and rural health, and always protecting the dignity of life from conception to natural death.
Finally, we exist to promote independence—to help Americans lead flourishing, fulfilling, independent lives. That means using our programs for low-income Americans to support work, marriage, and family life. It also means providing the right supports for older Americans or Americans with disabilities to stay in their homes, in their communities, whenever possible.
Each of these strategic goals are priorities for the President, and I want to explain to you a bit about what we’ve been doing on each front.
I’ll start with lowering the cost and improving the quality of healthcare through patient-centered markets, because this is an issue of such great importance to the President.
Nearly every day, I’m on the phone with him, and he’s always interested in what we’re doing to lower costs: How are we going to get drug prices down? How are we going to get Americans better care? How are we going to make sure no Americans see their finances ruined by the cost of healthcare?
The first place to look is where government has gotten in the way of market forces, which bring down costs while increasing quality seemingly everywhere in our economy besides healthcare. But we also have to understand where other factors, like market concentration or powerful incumbents, have inhibited the growth of markets—and look at what we can do to build markets in those areas.
The instinct of looking for government culprits first has guided my entire career in healthcare and public service, dating back to my time at Yale Law School, which is not exactly a place known for relaying conservative orthodoxy. But I had a land-use controls professor, Robert Ellickson, who had a memorable lesson for his students.
He asked us, when you’re taking the Metro North from Connecticut into Manhattan, and you see burnt out buildings or vacant lots, and you wonder why that land isn’t being put to its highest and best use—even if that’s just a parking lot—always ask yourself, how is the government involved here? It usually is.
That is true of so much of healthcare. Ronald Reagan had a memorable line about how Washington usually looks at problems, and it’s typified how people look at healthcare for so long.
“Government’s view of the economy could be summed up in a few short phrases,” he said. “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
As just one example, that’s more or less how Obamacare worked: It put new regulations on health insurance. And it put new taxes on health insurance. But it also provided subsidies for health insurance. And it put a tax on not buying health insurance—until President Trump repealed that.
So President Trump’s approach is very different from the typical Washington approach. We are looking at how we can remove government distortions and empower individuals and patients to get quality care at a lower cost—whether that means undoing harmful government action or taking other steps to facilitate markets, provide pricing signals, and put patients in control.
Over the past year, for instance, we’ve expanded the variety of ways Americans can purchase health insurance, through new ways for employers to pay for health coverage, new ways for employers to band together to buy insurance, and new insurance options for individuals buying insurance on their own.
Together, these three efforts, once fully implemented, are projected to provide nearly 2 million more Americans with health insurance—that’s almost one-fifth of the number of people currently on the Obamacare exchanges, going from uninsured to insured, without any expansion of government or increase in taxes.
But we also think we need to go beyond just health insurance, to bringing more market forces to how we pay for actual healthcare services and prescription drugs.
One example is a recent initiative we launched to enroll more than one-quarter of Medicare beneficiaries in payment arrangements where their primary care doctors aren’t paid for each procedure they administer, but instead paid for keeping you, as the patient, healthy and out of the hospital.
Enterprising doctors and primary-care practices will have tremendous opportunities under this initiative to save on regulatory costs, and actually make more money than they do now, by taking on the risk of whether their patients end up with excess costs.
This initiative, called Primary Cares, will also be the first time in the history of the Medicare program that groups of doctors will really be able to compete for patients—essentially, creating a market in Medicare, centered around serving the patient, where it had never existed before.
Another key piece of the healthcare cost puzzle is high drug prices, which burden so many older Americans and Americans who live with chronic health conditions. A year ago last month, the President and I released a blueprint for fixing this problem—for bringing down drug prices through more competition, better negotiation, incentives for lower list prices, and lower out-of-pocket costs.
Since then, we’ve seen more action from this President, and more results, than any previous President on prescription drug pricing.
We’ve had two straight years of record generic drug approvals from the Food and Drug Administration. Those approvals saved American consumers $26 billion just from January of 2017 through July 2018.
We’ve introduced new negotiating tools to Medicare, and they’re already lowering costs for seniors who are enrolled in Medicare Advantage, because we brought to government programs the tools that are already effectively used elsewhere in the drug marketplace.
But there are also places we need action in order to provide the essentials of market competition, like clear pricing signals. Today’s prescription drug market is so characterized by opacity, backdoor deals, and market concentration that it’s really not a market at all—and we need active steps to restore competition.
For instance, the current shadowy system of drug rebates pushes prices perpetually higher, allowing all actors in the system to make more money every year, while patients keep paying more out-of-pocket. Does that sound like any market you’ve heard of?
That’s why we’ve proposed replacing this rebate system with upfront discounts for seniors at the pharmacy counter.
On top of that, starting next month, we’re requiring drug companies to put the list of their prices in TV ads. And because of legislation the President signed last year, when you’re at the pharmacy, your pharmacist can always tell you whether you’re getting the lowest possible price for the drugs you need.
Thanks to all of these efforts, the official government measure of prescription drug price inflation actually dropped for all of 2018, the first time that had happened in 46 years.
These are the kind of results you get under a President who isn’t afraid to take on special interests, and demands action, rather than talk, and we’re laying the groundwork for more such success in the years to come.
The second area I want to discuss today is HHS’s work to protect the lives of all Americans, which, as I mentioned, covers a whole range of public health efforts.
One of my top priorities as Secretary, and one of President Trump’s top priorities, has been combating the opioid crisis by providing more Americans with the compassionate, science-based treatment they need.
More Americans are dying every year from drug overdoses than from car crashes. But thanks to the President’s efforts to expand treatment, cut supply, and prevent addiction, and thanks to work on the ground in communities all across America, the trend is finally moving in the right direction.
In fact, 2019 will likely be the first year in more than a decade where drug overdose deaths in America finally drop.
But there are troubling trends in other areas. Today, for instance, American mothers are 50 percent more likely to die in childbirth than they were a generation ago. The numbers are especially troubling in rural areas, where access to care can be particularly challenging. The President has made it a priority for us to look at how all of HHS’s programs can better support maternal health and support access to care in rural communities, and turn these trends around.
Another key part of protecting American lives is combating infectious disease, both at home and around the world. That was one of our first missions as an agency, around the time of America’s founding. HHS’s first institutions were marine hospitals, established in the 1790s, to take care of sick and disabled sailors.
In the 19th century, these institutions took over responsibility for quarantining all people who arrived on our shores with infectious diseases. Today, HHS is actively engaged in efforts to stop the spread of infectious disease all around the world, including by responding to the Ebola outbreak in the Democratic Republic of the Congo.
Thankfully, we have wonderful tools of modern technology to stop the spread of many diseases. On Ebola, for instance, HHS-supported research means that we now have therapeutics for responding to this outbreak that we didn’t have during the last major outbreak, in 2014.
But we know we can always be making better use of the tools we have, and we know that because we are now seeing the largest outbreak of measles in America since the disease was declared eliminated from our country more than 20 years ago.
The only reason we’re seeing the spread of a disease that is easily preventable by a safe, effective vaccine is because some parents have been duped into thinking that vaccines are harmful to their children, or pose some religious issue.
We’ve seen that thinking in some particularly liberal communities, on the West Coast, but also in some Orthodox Jewish communities as well. In the midst of this outbreak, HHS has worked closely with Jewish authorities, especially in New York State, to help assure parents that vaccines are safe, effective, and essential to our children’s health.
We appreciate the eager cooperation and dedication of many Jewish leaders on this issue.
Combating misinformation requires affirmation from trusted sources, so I encourage you all to look into what you can do to help shore up parents’ confidence that vaccines are a vital way to protect their children and their communities.
Finally, protecting life means protecting it from conception until natural death. I won’t run through all of our accomplishments on this front, but from family-planning services to Obamacare rules, conscience protection, and global health funding, I’m proud to say President Trump has proven himself to be the most pro-life President in American history.
The final goal of HHS I want to mention is promoting Americans’ independence and self-sufficiency.
I’ll go back to a Reagan maxim again, that the goal of any welfare program ought to be, to the extent possible, to eliminate the need for its existence. Well, I run a lot of welfare programs—and I’d love to be put out of business.
The way to do that, of course, is to ensure that these programs support those things that enable independence: finding work, encouraging marriage, and strengthening family life.
The single largest program HHS runs for low-income Americans is Medicaid, which is now more than half a century old. It’s spent more than $7 trillion over that time period to provide health insurance to Americans in need.
And yet it wasn’t until President Trump took office that anyone seriously considered how Medicaid could be used not just to provide health insurance, but also encourage behaviors, like finding work and other forms of engagement with your community, that will provide people with better mental and physical health.
Under President Trump, we have now approved five different states’ implementation of requirements for this kind of community engagement in Medicaid, so that it becomes more than just an insurance card, but a pathway out of poverty and to better health.
At the same time, we’re also looking hard at how to return the federal cash-welfare program, which is run by HHS, to the bipartisan, successful principle of the 1990s welfare reform: temporary assistance to help individuals return to work and support their families.
In theory, state governments, which administer cash welfare, have to demonstrate each year that they are moving some share of families off of the program and into work.
But states have been able to game this system such that many barely have to move any individuals off the program at all in a given year, and the President’s budget has laid out solutions for fixing that.
One exciting part of these efforts is that there is absolutely no better time to be helping low-income Americans find work, because there is so much opportunity to go around.
You all know the numbers: We are at the lowest unemployment rate ever recorded for black, Hispanic, and Asian-Americans. More Americans are employed than ever before in history. Wages are growing at a healthy clip for the first time since before the financial crisis—and they’re growing fastest for low-income workers.
That is all thanks to President Trump’s economic leadership, and it makes our job of promoting independence a whole lot easier.
I should say, though, we do these things because we know they work, as a policy matter. But the dignity of work is actually an ancient piece of wisdom, one we all know on a spiritual level.
In Genesis, before the fall, Adam and Eve were told to work in the Garden of Eden—because work is part of what gives us dignity as humans.
The legendary Jewish thinker Maimonides taught a similar lesson, laying out eight levels of charity. The lowest level, for instance, was giving, but giving reluctantly.
The highest, truest form of charity was not to give charity at all, but to make a person self-sufficient—to give them a gift, a loan, or a job that freed them to support themselves.
That is the highest aspiration we can have for our work with America’s least fortunate, too.
So those are three areas where we are hard at work on the President’s agenda: better, lower-cost healthcare through patient-centered markets, respecting life and saving lives, and promoting independence and dignity for all Americans.
It’s a broad agenda, but we have an ambitious President, who’s already achieved historic results in all three areas.
So thank you for inviting me here to share that work with you, and thank you for your attention today. I’d now be happy to take some questions about our work at HHS.