Stories

The health care industry's happy holidays

Illustration of lumps of coal in a pill bottle.
Illustration: Eniola Odetunde/Axios

The year-end spending bill in Congress epitomizes the power of health care interests.

The big picture: There are lots of goodies for the industry, while patients will get the worst kind of holiday surprise — more medical bills.

The bill includes some of the usual health care "extenders" — keeping money flowing to rural hospitals and community health centers, and again delaying cuts to hospitals that treat the poorest patients.

  • But in the weeds of the negotiations, industry came out even better than you may have realized. The health care industry's lobbying clout isn't new, but it's striking to see how this end-of-2019 package turned around.
  • This was the bill that, once upon a time, might have been the vehicle for deals to reduce drug prices and crack down on unscrupulous billing practices. Instead, it became an industry giveaway.

A fix for surprise medical bills didn't make the cut, and drug pricing fell apart months ago.

  • Congress was close to a fix for surprise bills, but dropped it at the last minute, punting the issue to next spring at the earliest, which means patients will still be on the hook for bills they never saw coming.
  • The bill also doesn't include changes to secretive contracting terms in the pharmaceutical supply chain and in hospitals.

Congress did find time, however, to repeal several Affordable Care Act taxes — a particularly big win for health insurers that sell Medicare Advantage plans.

  • The bill also gives more drugs — for example, some that treat diabetes or osteoporosis — 12 years of market exclusivity instead of the five years they would have gotten. "That's a big win for pharma," said Peter Maybarduk, a policy expert at Public Citizen. Industry lobbied in favor of this earlier this year.
  • Hospitals that perform certain stem cell transplants will now get paid by Medicare for the costs associated with acquiring those stem cells. Hospitals and industry-backed groups have long lobbied for this policy, which will add an average of $50,000 to $65,000 in extra pay for each procedure.
  • Companies that make some radioactive substances for PET scans will get an extra nine months of higher pay from Medicare.
  • Clinical labs won a one-year delay on price-reporting requirements. This will give them more time to collect data from higher-priced labs, which will be used to drive up their pay in the face of recent Medicare cuts.

The big picture: All of these policies will materially benefit pretty much every sector within an industry that already wields more financial power than ever.

  • Aside from a provision that stops brand drugmakers from blocking generic drugmakers from getting their medicines, patients aren't getting a whole lot — other than an inevitably higher spending tab.