Meet the New Secretary of Health and Human Services

By George W. Chapman

President-elect Biden has nominated current California Attorney General Xavier Becerra for the post of secretary at Health and Human Services. Becerra will replace former big pharma executive and lobbyist Alex Azar. As California AG, he was a strong champion for consumers. Becerra sued giant Sutter Health System for driving up prices causing Sutter to settle for $575 million. He sued Teva pharmaceutical for a “pay and delay” scheme causing Teva to settle for $70 million. Becerra will inherit a surging pandemic, overwhelmed and financially stressed providers and the mass distribution of COVID-19 vaccines. He will oversee rule changes for expanded telehealth services, hospital pricing transparency and provider reimbursement that is transitioning away from traditional fee for service to pay for performance and bundled care reimbursement. Industry trade associations like the AMA, AHA and Association of Health Insurance plans (AHIP) have lauded the nomination hoping Becerra hits the ground running. They see him as a much-needed consumer advocate in that position.

Geographic Direct Contracting

The new HHS secretary will oversee the rapidly increasing transition from fee-for-service volume-based reimbursement to more cost-effective models that require coordination and risk assumption among providers in a specific region.

The goal is to improve the quality, access, integration and outcomes of medical services delivered to Medicare and Medicaid members while also lowering costs. Physicians and hospitals serving a defined region would coordinate management services, telemedicine, provider recruiting, purchasing and develop a preferred panel of quality providers. The new entity would be paid via capitation, so much member per month, based on the area’s historical claims. The entity can keep any savings it creates based on the amount of risk it assumes.

The incentive for Medicare members to join the newly formed integrated network is improved care and a reduction in the amount of health premium deducted from their social security check. CMS, which determines physician reimbursement, recently proposed a “budget neutral” fee-for-service schedule. What that means is increases for some services, typically primary care, will be offset by decreases in other services, typically specialty. While the AMA has registered disappointment, CMS is sending a clear message that fee-for-service reimbursement is being phased out in favor of alternative payment models as herein described.

New CDC Director

Biden has nominated current chief of infectious disease medicine at Massachusetts General, physician Rochelle Walensky, for the post of CDC director. She will replace Robert Redfield. Walensky is also on the faculty at Harvard. Two thirds of us live in areas with limited to no access to an infectious diseases specialist. There has been a critical shortage of I.D. physicians. Thanks to the notoriety of colleague Anthony Fauci and her recent nomination, applications to medical school are up 18%, an all  time high. The expectation is many medical students will elect to specialize in infectious diseases.

Retail Primary Care Accelerating

Retail druggist Walgreens has invested $1 billion in primary care provider VillageMD. The partnership plans to expand beyond their Houston-based pilot market and open up 40 more pharmacy/primary care centers by summer and 500 more over the next five years. The business model intends to increase the involvement of pharmacists in the delivery of effective primary care to its members with emphasis in underserved areas. The entry of these well-financed for-profit retail medicine clinics into the market presents a competitive threat to typically under-financed private practices, federally sponsored clinics and hospital-sponsored practices. Tech oriented primary care startup Carbon Health recently received a $100 million infusion from investors in addition to the initial $28 million infusion in May.

The goal is to open 1,500 clinics by 2025 and 100 pop up COVID-19 clinics now. Carbon Health will offer “omnichannel” care via retail clinics, video, phone apps and work place clinics. Traditional providers of care have their reimbursements controlled and set by Medicare and commercial payers which prohibits them from amassing decent profits and building huge cash reserves for expansion. The entry of cash laden for-profit corporations, which have been free of price controls of any kind, creates an unfair playing field.

Vaccine Distribution

Operation Warp Speed has accomplished the “easier” part of the mission: development and approval of a COVID-19 vaccine by the end of 2020. Several drug manufactures — including Pfizer, Moderna, Astra Zeneca and Johnson & Johnson — met the challenge. The harder part of the mission will be the efficient distribution and storage of the vaccines in 2021. The plan is to have 100 million of us vaccinated by the end of February, which should cover healthcare workers and nursing home residents. The challenges are: ensuring the second dose of Pfizer and Moderna vaccines are available and given within the recommended follow-up period; storing the Pfizer vaccine in super sub-zero refrigerators; (Moderna can be stored in regular refrigerators); ensuring providers, typically clinics and physician practices, that give the vaccines are adequately trained and prepared for the onslaught; and determining priorities based on: age, comorbidities, essential, military, school, etc.

ICU Nurses Give Perspective

The Washington Post recently ran interviews with ICU nurses from across the country: Idaho, Mississippi, Iowa, Illinois, Utah and Ohio. Most of us are far removed from the battle zone in hospitals and need to be reminded what it is like for our first defenders and healers. The nurses revealed what it’s like to work in their highly stressful environments. Here is the gist of the interviews. Some people arrive barely short of breath and tell the nurses they feel fine. Within just hours, many of these patients go into rapid oxygen decline and end up on a vent or deceased. Nurses are used to processing death, but they say the pace of death caused by the virus is overwhelming. (As of this writing we are over 3,000 deaths per day.) Nurses and physicians are getting sick, but it’s not from lack of PPE. It’s from community spread. They are angry at people who believe the virus is no big deal or even a hoax and bristle at the mixed messages from our leaders. As the surge in hospitalizations increases, and vents are fully utilized by COVID-19 patients, nurses worry about treating incoming heart attacks and other serious illnesses or injuries requiring an ICU bed. They are pleading with us to do our small part and follow CDC guidelines.

Music can soothe

A survey by music streaming service Pandora, with about 65 million users, revealed 80% of respondents said music has helped them cope with the pandemic. 58% of the respondents said music was their “go to” coping mechanism. The average time spent listening to music was 40 minutes. Experts report music can ward off or mitigate anxiety and depression, improve blood flow and lower stress-related hormones

George W. Chapman is a healthcare business consultant who works exclusively with physicians, hospitals and healthcare organizations. He operates GW Chapman Consulting based in Syracuse. Email him at