WASHINGTON – When Alex Azar had to rush his three-year-old son to the emergency room for a cut near his eye in 2006, the attending physician asked Azar if he wanted a plastic surgeon called in.
“How much more will that cost?” Azar asked, only to be looked at “as if I were from Mars.”
Azar wasn’t trying to have his son treated on the cheap; he just wondered whether in this case a specialist could do anything more for him than the attending physician.
It turned out that the stitches his son received from the plastic surgeon were exactly the same as what the attending physician would have done — but at a much higher cost.
“It’s absurd to me that one of the largest segments of our economy is organized and operates in such a way that consumers have no real ability to learn about price or quality,” Azar said in a speech when he was the No. 2 official at the U.S. Department of Health and Human Services during the George W. Bush administration.
President Trump on Monday tweeted he is nominating Azar for the top HHS job, a replacement for Tom Price who resigned as secretary in September after racking up hundreds of thousands of dollars in travel bills for chartered flights.
If Azar is confirmed, he is likely to resume his focus on the cost of health care — and how to get more value out of the system — which captured his attention both during his past stint at HHS and while a top executive at Eli Lilly, the Indianapolis-based pharmaceutical giant.
“I’m just absolutely sure that he would continue to drive that,” said Mary Grealy, the head of the Health Care Leadership Council.
That would be just one of the many ongoing challenges Azar would face.
The Health and Human Service Department, with a more than $1 trillion budget and about 80,000 employees,has by far the largest budget of any federal agency.
And federal health care spending is projected to grow from its current 28 percent of all government spending, excluding interest on the debt, to 40 percent in 2047.
Through the government’s expensive and extensive health care programs — as well as the actions of agencies under the secretary’s control such as the Food and Drug Administration, the National Institutes of Health and the Centers for Disease Control and Prevention — the HHS secretary can regularly impact the wellbeing of most households.
Yet, the ongoing fight over Obamacare — both whether it should be replaced by Congress with something else and how the Trump administration is running the existing program — has made the position highly politicized.
Still, it’s easy to see why Azar would be selected for the job.
He’s widely praised for his intellect, has strong conservative credentials, is a critic of the Affordable Care Act, and knows Vice President Pence. And, of course there’s his prior experience at HHS, as well as his dozen years of private sector experience at Lilly.
“If the president is looking for an experienced, competent conservative who can be confirmed, Alex is a good choice,” said former HHS Secretary Mike Leavitt.
Promising to schedule a confirmation hearing promptly, Tennessee Sen. Lamar Alexander, the GOP head of the Senate health committee, said Azar has the qualifications and experience to get results."
While Azar is likely to face questions about whether he would side with the drug industry over consumers, and Democrats will challenge his criticisms of the Affordable Care Act, he had bipartisan support when he was confirmed in 2005 for the No. 2 job after serving as the department’s general counsel.
“I am glad to hear that you have worked hard, and brought fair-minded legal analysis to the department,” Democratic Sen. Max Baucus said at Azar’s last confirmation hearing.
Andy Slavitt, who ran the Affordable Care Act and the Centers for Medicare & Medicaid Services during the Obama administration, said he has reason to hope Azar would be a good secretary.
“He is familiar with the high quality of the HHS staff, has real-world experience enough to be pragmatic, and will hopefully avoid repeating the mistakes of his predecessor,” Slavitt said.
Accidental career in health
Although Azar is the son of an ophthalmologist – who still practices in the Maryland community where Azar grew up – he’s said he ended up in health care “largely by accident.”
After getting his law degree from Yale University in 1991, Azar clerked for Supreme Court Justice Antonin Scalia.
“I’d describe him as serious,” said Mike Murphy, an Indianapolis-based GOP public relations executive. “He’s not a back slapper. He’s intense. The minute you meet him, you know how bright he is.”
In 1994, Azar went to work for his mentor, Ken Starr, who was heading the independent counsel investigation into Bill and Hillary Clinton’s Whitewater land deal. Azar was one of two assistant independent counsels in Washington working on the investigation, which eventually led to the impeachment of President Clinton on charges stemming from a sexual harassment lawsuit against Clinton.
Azar had a significant role in another major political controversy when the outcome of the 2000 presidential election hinged on a recount in Florida. Azar was on the Bush team of lawyers whose side ultimately prevailed.
Bush’s first HHS Secretary, Tommy Thompson, then changed the trajectory of Azar’s career by asking if he wanted to be the department’s general counsel.
“I’ll confess that I wrestled with the question, since I had not focused on health law in my legal career,” Azar wrote in a piece published on Yale Law School’s website.
But a month into the job, Azar wrote, he realized he’d found his life’s calling: “to help people around the world live longer, healthier, and happier lives.”
Thompson said HHS was in the eye of the storm after the 2001 terrorist attacks, and Azar had an important role in responding to the resulting public health challenges, as well as the subsequent anthrax attacks, making sure there was a vaccine ready for small pox, and dealing with outbreaks of SARS and influenza.
“He knows the job, and knows how to get the job done,” Thompson said.
When Leavitt replaced Thompson in 2005 and Azar became his deputy, Leavitt delegated a lot of the rule-making process to Azar.
“Understanding the administrative rule process in the circumstance we’re in today could be extraordinarily important because a lot of the change in the health care system, given the fact that they’ve not succeeded legislatively, could come administratively,” Leavitt said.
He also put Azar in charge of the department’s response to Bush’s initiative to improve government performance. Agencies were judged on various management categories, with a dashboard tracking if they had achieved a red, yellow, or green status in each area.
Leavitt told Azar he wanted every square green. And HHS became the first agency to accomplish that.
“That’s at least an indication of his personality,” Leavitt said.
Landing at Lilly
Another person who became impressed with Azar during his HHS tenure was Lilly CEO Sydney Taurel.
When Taurel heard Azar was leaving government, he hired Azar in 2007 to be the company’s top lobbyist and spokesman. (At the time, Lilly was being sued by seven states alleging it promoted off-label uses for Zyprexa — along with other public policy challenges.)
“He did a terrific job in that capacity,” said Taurel, who left Lilly in 2008. “He’s very bright. He’s very competent. He’s respected. He’s thoughtful. He goes to the heart of issues very quickly.”
When Lilly needed a Democrat, instead of a Republican, in the position of senior vice president for corporate affairs and communications after Democrats retook the White House in 2008, Azar moved into a different job. He was eventually promoted to run Lilly USA, the sales and marketing operations of the global company’s U.S. commercial business.
From the beginning of his time in Indiana, Azar was involved in the community – including serving on boards of the Indianapolis Airport Authority and the Indianapolis Symphony.
“He really poured himself into the community,” said John Hammond, and Indianapolis-based lobbyist and member of the Republican National Committee.
That included a high level of involvement in Republican politics.
“He’s been a very loyal, thoughtful guy in a little more behind-the-scenes fashion,” Murphy said.
While contributions from Lilly’s political arm are bipartisan, Azar’s personal donations have been to fellow Republicans, according to federal disclosure reports analyzed by the nonpartisan Center for Responsive Politics. Prominent Republicans he’s helped over the years include Pence, Senate Majority Leader Mitch McConnell, R-Ky., Senate Finance Committee Chairman Orrin Hatch, R-Utah, and Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tenn.
In 2016, Azar served on the Indiana steering committee for Jeb Bush's presidential campaign. But after Trump secured the GOP nomination, Azar contributed $2,700 to a "Trump Victory" committee that jointly raised funds for the nominee and the GOP.
Despite being a loyal Republican, Azar is always willing to listen to the other side of an argument – and adapt his view if needed, Hammond said.
“He demonstrates the great openness of mind that’s important when you have to find compromises and so forth,” agreed Taurel. “But, no question, this is a challenging assignment for anybody.”
After Azar did not get the top job at Lilly following CEO John Lechleiter’s retirement in 2016, he left the company at the beginning of 2017. He remained in Indianapolis, where he started a health care consulting firm.
Not being chosen for CEO could end up being a good thing, Hammond said, because it’s unlikely Azar would have been considered for HHS secretary.
“I think he’s excited about this,” Hammond said. “He found his work at HHS really rewarding.”
Another Indiana connection
If confirmed, Azar would be a major addition to the already significant number of people from Indiana in key positions to direct federal health policy.
Seema Verma, the Indiana health care consultant who helped create Indiana's alternative Medicaid program and knows Azar, heads the Centers for Medicare and Medicaid Services. Verma’s deputy chief of staff is a former aide to Pence, as is the director of Medicaid who previously served as Pence’s health care policy director when Pence was governor.
Another former Pence health policy aide is a liaison between HHS and Congress.
Long-time Pence aide Matt Lloyd is a top HHS spokesman.
And Indiana’s former state health commissioner, Dr. Jerome Adams, is surgeon general.
Azar has called Verma “one of the leaders in reinventing Medicaid.” He shares her view that the health care program for low-income Americans has to be put on a more “sustainable” financial footing, and states should be given more accountability and responsibility for running the joint federal/state program.
On the individual insurance market, the other major aspect of health care restructured by the Affordable Care Act, Azar has echoed the Trump administration’s view that the market is failing.
“Obamacare is going down right now,” Azar told Fox News in July. “It is an almost impossible market to do from an insurance perspective.”
He’s said the regulations need a “top-to-bottom comprehensive rewrite” to impose “as much free market, localized flexibility as humanly possible.”
Azar will likely be grilled about those views by Democratic senators, who argue the administration’s actions are sabotaging President Obama’s signature domestic policy achievement.
“I will closely scrutinize Mr. Azar’s record and ask for his commitment to faithfully implement the Affordable Care Act," Oregon Sen. Ron Wyden, the top Democrat on the Senate Finance Committee said Monday.
Wyden also said he will press Azar to commit to lowering drug prices, which are much higher in the United States than in other countries. Prescription drugs are the fastest-growing part of the U.S. healthcare system and Lilly is among the insulin manufacturers under fire for big increases in their drugs’ list price.
Trump has frequently attacked drug prices, including accusing pharmaceutical companies of "getting away with murder." Picking Azar to head HHS shows he’s not serious, said Robert Weissman, president of the consumer group Public Citizen.
“It is highly unlikely that a pharmaceutical company executive who has made passionate arguments against price restraints is going to advance real reform,” Weissman said.
Azar has spoken out against price controls on drugs and warned against a “disregard for intellectual property.”
“A vigorous and profitable drug industry is not a problem to be solved,” Azar said in 2006 speech while HHS deputy secretary, “but a goal to be encouraged.”
Grealy, the head of the Healthcare Leadership Council which represents large health care corporations, said Azar has been involved in other approaches to controlling costs. She pointed to initiatives Azar, while at Lilly, worked on with insurance companies to move to reimbursing drug companies based on how well their products work.
“I am sure if he does get this position he would continue this movement toward what we call a value-based system” rather than paying for health services in volume, she said.
Payments for insulin, for example, would be tied more to whether a patient’s diabetes is under control and costly-complications are avoided, said Mark McClellan, who headed both the Centers for Medicare and Medicaid Services and the FDA during the Bush administration. That’s consistent, he said, with Azar’s faith in “the competitive approach” to reducing cost and improving care.
“There are lots of opportunities to make care less costly and more prevention-oriented,” he said. “You would expect to see a lot of emphasis on innovative, competitive approaches, and state-based approaches, to try to facilitate those needed reforms in health care” if Azar is confirmed.
During his last stint at HHS, Azar’s diagnoses of the main illnesses of the health care system were that it’s price blind, quality silent, puts incentives in the wrong place and makes the most expensive medical device “the pen in the hand of the doctor.”
“We need to transform our system,” Azar said, “so people know what they are paying for health care, so they know whether they are getting good quality health care, and so they have a reason and ability to care.”