Jul 16, 2019

Health care hopes Q2 quells jittery market

Health care earnings season starts in earnest this week. Photo: Drew Angerer/Getty Images

Johnson & Johnson today kicks off second-quarter earnings for a health care industry that has been fighting Wall Street jitters despite record-level profits.

The big picture: Wall Street has low expectations for all of corporate America in Q2, but health care may be different. A lot of the industry isn't affected by the Trump administration's trade war with China, and all available data suggests health care spending is not meaningfully slowing down.

Driving the news: Johnson & Johnson faces unique situations, like Oklahoma's demand that the company pay $17.5 billion to settle its opioid case and a possible criminal probe into its baby powder.

  • While those types of cases affect future profits, Johnson & Johnson and other health care companies are raising prices and getting more people to use their products and services.
  • Most health care sectors are expected to increase earnings per share by at least 8% this year, although pharmaceuticals will come in at slower rates, according to FactSet estimates.
  • Health care, unlike technology and nonessential consumer goods, is less exposed to tariffs, and the industry gets reliable cash flows through taxpayer funding and workers' paychecks.

What we're watching: Health insurance companies.

  • They've combined with pharmacy benefit managers, putting them on pace to become bigger than the Big Tech stocks this year, and they have routinely registered higher-than-expected profits the past few years.
  • The GOP tax law and a hiatus to an Affordable Care Act tax have helped, and now insurers avoided a regulation that would've eliminated a source of drug revenue.
  • Health insurance "earnings have been exceptionally strong, and we expect 2Q19 earnings to continue on this path," Barclays analysts wrote in an investor note.

Go deeper: Follow along with our updated health care earnings tracker.

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The health care debate Democrats aren't having

Candidates at the Democratic debate in Detroit. Photo: Justin Sullivan/Getty Images

Tuesday night's field of presidential candidates fought in 30-second soundbites over the merits of single payer Medicare for All versus a public option.

Yes, but: None of the candidates moved beyond sparring over insurance reforms to address the underlying reason why people are having so much trouble affording their health care, which is that health care services keep getting more expensive.

Go deeperArrowJul 31, 2019

Health Care Vitals: Chicago

Kai Tao, Founder of Juno4Me, discusses the importance of preventative care at the Axios roundtable. Photo: Chris Dilts for Axios

This Wednesday, Axios' Sam Baker hosted an Expert Voices Live discussion in Chicago, digging into the state of health care access and affordability in Illinois.

Local leaders, health tech innovators, and advocates discussed solutions to challenges in health care policy and providing equitable, high-quality care.

Creating inclusive and comprehensive health care

How to measure the impact of effective care was a significant topic of conversation, as well as the fundamentally integrated nature of health across dental care, reproductive care, mental health services, and more.

  • Clark Stanford, Dean of the College of Dentistry at the University of Illinois at Chicago, discussed how dental health acts as a useful indicator for a person's overall health: "Health disparities are revealed in dental care — dental care reflects a patient's larger quality of life."
  • Felicia Davis, President and CEO of the Chicago Foundation for Women, unpacked the importance of measuring health outcomes versus outputs: "For example, if we give a girl a backpack, does her attendance improve? While saying we donated one thousand backpacks is measuring the output, we want to be measuring outcomes."
  • Paula Thornton Greear, Vice President of External Affairs for Planned Parenthood of Illinois, expressed support for measuring outcomes over outputs, and approaching the concept of health as not subdivided into different fields: "In reproductive health...we need to work with our partners in the mental health space. We need to put our best foot forward, but we can’t do it in a silo."
How to use data in providing better care

As health providers become increasingly dependent on data, the importance of accurate and accessible information is paramount in providing effective care.

  • Bonnie Lai, Head of Technology at Lumere, advocated for a more integrated approach to health data: "We need data to understand the needs of patients, but the data is siloed and it’s hard to break out of that."
  • Jason Montrie, President of Pareto Intelligence, stressed the need to make data more accessible to patients: "How do we democratize this data? That structure needs to be furthered. Patients should be able to change [their information] so it's always updated and accurate. [And then] how do we take the whole picture of someone, and give that to [a health care provider] who can act on that information?
Health insurance and challenges of access to care

Challenges presented by the complexities of the current systems and addressing the needs of all patients featured prominently in the conversation.

  • Laura Starr, Director of Development and Communications at CommunityHealth, focused on the importance of preventative and integrated care: "We need to do what’s most cost effective and that’s prevention...and integration makes everything more effective."
  • Kai Tao, Founder of Juno4Me discussed the challenges of the current health care systems and addressing the needs of different populations: "There are really three different health systems: Medicaid, employer-based, and Medicare. How can we lift everyone up? Especially when there are different levers, different populations to serve. What this goes back to is to start people young and focusing on preventative care."
    • Regarding the cherry-picking of patients with different types of coverage: "The reality is that dentists don’t want to see Medicare patients."

Thank you Delta Dental for sponsoring this event.

Keep ReadingArrowJul 25, 2019

Boris Johnson set to become U.K. prime minister

Illustration: Aïda Amer/Axios

Boris Johnson easily defeated Foreign Secretary Jeremy Hunt to claim the leadership of the U.K. Conservative Party on Tuesday, setting the stage for him to become the country's next prime minister tomorrow.

The big picture: Johnson played a central role in pushing the "Leave" campaign over the top in the 2016 Brexit referendum — a shock result that unleashed the political chaos that consumed Johnson's most recent predecessors, David Cameron and Theresa May. Now, the man is meeting the moment he helped create.

Go deeperArrowJul 23, 2019