Jun 16, 2018

Axios AM

🚑 Happy Saturday and welcome to a fresh Deep Dive, "The next health care wars." Our first three weekend Deep Dives — China's leg up on the U.S., the anti-robot revolution, and the new era of global trade wars — were among our most popular offerings in the 17 months of Axios.

  • To get smarter faster on health care each weekday morning, sign up free here for Axios Vitals. and let me know what you think of today's edition: mike@axios.com.
  • Breaking late yesterday: Theranos founder Elizabeth Holmes was accused by federal prosecutors of criminally defrauding investors, patients and doctors. Holmes stepped down as CEO but will remain chair. Go deeper.
1 big thing: The next health care wars

Illustration: Rebecca Zisser/Axios

Forget the Affordable Care Act. The future of our health care system will be shaped by a much bigger and broader fight — one that will likely culminate with a 2020 choice between private markets and an authentic government-run program in the form of a Bernie Sanders-style Medicare for All. 

  • This is one of America's great unsolved problems: We have the world's best care, talent and innovation. But before it gets to patients, the magic goes through a hodgepodge of inexplicable, expensive and unnecessary hurdles.
  • What's next: The health care debate is no longer a linear fight over a straight repeal of President Obama's health care law. Instead, it has metastasized into a multifront war.

One of our most vital national systems is falling apart:

  • Medicare is running out of money faster than expected — a reminder that no one's dealing with that problem, and that there's no way to duck it in 2020. 
  • The opioids crisis continues, with Congress trying to pass a ton of mini-bills to look like it's doing something. A few of them might make a difference. This remains a crisis — and a costly one. 
  • And don't forget prices. The U.S. doesn’t use more health care than other countries — we just pay more for it. Consumers are getting sick of it, and eventually they’ll respond to politicians with plans that seek to bring down prices (as they already have on prescription drugs).
  • Polls show health care is at the top of the list of voters' concerns for the midterms. So look for it to dominate the early rounds of 2020.

The new battlegrounds, as sketched by Axios managing editor David Nather:

  • The ACA repeal fight has moved to the courts, and the Trump administration has picked a fight over preexisting conditions — one of the most popular parts of the law.
  • But Republicans haven't given up on repeal. A group of outside conservatives is about to unveil a new plan and push congressional Republicans to take one more vote before November's midterms — even though there's no sign that any votes have changed.
  • "There's going to be at least one more grassroots effort to convince them to take another run at health care" so base voters don't think Republicans have given up, said Lanhee Chen of Stanford, a former Mitt Romney adviser who's part of the group.
  • Democrats have moved on to Medicare for All. The fight to watch will be between establishment Democrats, who want to make it voluntary and preserve a role for employment-based private insurance, and Democrats from the Sanders wing who are ready to move everyone into a government-run system.
  • "Democrats have always felt that health care should be a right," and they've watched the ACA actually become more popular under attack, said Neera Tanden, a former Hillary Clinton adviser who heads the Center for American Progress.
  • ACA premiums are going up, and for the first time it's Democrats who will try to turn that into a campaign weapon.
  • But health care spending and premiums are rising for everyone else, too.

The bottom line: The cost of health care — both for individuals seeking coverage and the government seeking sustainability — promises to return as the biggest domestic issue once the Trump obsession burns off. 

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2. Where the money goes
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Data: Centers for Medicare & Medicaid Services. Chart: Kerrie Vila/Axios

Health care accounts for almost one-fifth of the American economy, making it the most expensive system in the world, by a wide margin.

  • And the cost isn't going up because we're using more health care, but because of the prices we pay for those services.

What's next: There's agreement between the parties that the way we pay for health care — paying doctors and hospitals for each service they provide — is broken. The Affordable Care Act tried to advance a more integrated model and tie payments to the quality of care. Health and Human Services Secretary Alex Azar shares those goals.

  • Be smart: One person's health care spending is another person's salary. For the system overall to spend less money, health care providers will have to make less money. And that's always a hard sell.
3. Medicare is running out of money
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Data: Congressional Budget Office. Chart: Chris Canipe/Axios

Medicare is the fastest-growing part of the federal budget aside from interest payments — a problem that has only been made worse by declining revenues under the GOP tax law, Axios' Caitlin Owens reports:

  • Spending is expected to grow by 117% over the next decade due to rising health care costs and an aging population.
  • There’s no sense of urgency in Washington about this.
  • And even if there was, this political environment sinks any chance of massive problem-solving.

Why it matters: The Medicare trust fund runs dry by 2026 if Congress doesn't pass benefit cuts.

  • While that just means that there won’t be money to fill in the gap between Medicare spending and tax revenue paying for it, the gap only gets worse after that.

What they’re saying: “Lawmakers have their head in the sand,” said Marc Goldwein of the Committee for a Responsible Federal Budget. “For the most part, nobody wants to touch this.”

Go deeper on what happens when Medicare goes broke.

Bonus: Why we don't have universal health care

Illustration: Caresse Haaser/Axios

Got two minutes? The Axios video team will get you up to speed on why we have the health care system we have, and why we never got something that covers everyone.

  • The bottom line: We never decided what our top priority should be — coverage or innovation. And that's not about to change.
  • Watch the video.
4. We're right to be worried
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Data: NBC News/Wall Street Journal Survey; Note: Survey conducted June 1-4, 2018 amongst 900 registered voters; CHART: Kerrie Vila /Axios

Health care has always been near the top of voters' priorities, but lately it's been the No. 1 issue in a slew of recent polls — including NBC News/Wall Street Journal, CBS News, and Quinnipiac.

Between the lines: That's driven largely by Democratic voters, who are intensely interested in the issue this year. (Republicans and independents still cite the economy as their top priority, but health care isn't far behind.)

  • So Democratic voters will drive a lot of the discussion on health care in the midterms — and they're not happy about the ACA repeal efforts.
  • But there's also strong bipartisan concern about the opioid crisis — and a strong feeling from all voters that the federal government hasn't done enough about it.
5. Why care costs so much
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Data: Kaiser Family Foundation; Cartogram: Kerrie Vila and Chris Canipe/Axios

Next year is going to be another year of big ACA premium increases — but this time Republicans won't be able to pin all the rate hikes on Democrats.

  • These are the first rate hikes since Congress got rid of the individual mandate penalty. It was the most unpopular part of the ACA, but it was there to make sure healthy people bought coverage.
  • Without the healthy people, there are probably going to be more premium increases since insurers can't count on them to balance the costs of sick people.
  • The rate hikes for next year are mostly in double digits so far.
  • That's not the only reason rates are going up. There's also the prices doctors and hospitals are charging for their services, and the rising cost of prescription drugs.
  • In Maryland, Kaiser Permanente says it's raising premiums by an average of 37% for next year for lots of reasons. But the end of the mandate is "expected to have a significant impact, driving a large reduction in membership," according to the company's rate filing.

The big picture: These rate increases aren't hitting everyone in the country. It's just the 7% of Americans who get their health insurance through the ACA.

  • The takeaway: Health care is getting more expensive for all of us — as health care spending and premiums have been growing faster than household incomes for the past decade.

Go deeper:

6. Democrats' next war: Medicare for All

Illustration: Rebecca Zisser/Axios

Democrats of all stripes are embracing some form of "Medicare for All." Now they just have to decide what that means, Axios health care editor Sam Baker writes:

  • For Sen. Bernie Sanders, it means scrapping the entire U.S. health care system and moving everyone into a pure single-payer system with no role for private insurance.
  • For more moderate Democrats, it means letting people buy into the existing Medicare program (which relies on private insurers pretty heavily) or establishing a new public insurance option alongside private coverage.

But the core idea is the same: The government should cover more people.

The odds: Medicare for All isn't imminent. But universal, government-provided coverage is legitimately on the table for the first time since the '70s, and that makes incremental steps toward universal coverage far more likely.

  • Polls show that people support both "single-payer" and Medicare for All, but that support is soft.
  • Even narrowly factual arguments against it — like, the government would be in charge — cause supporters to change their minds. And the attacks would be a lot stronger than that if and when any real political push actually happens.

The takeaway: Medicare for All is a microcosm of the broader divides within the Democratic Party. The party's top 2020 contenders in the Senate have all signed on to Sanders' plan, while many more moderate Democrats are afraid the party is moving too far left on an issue that hurt them badly in 2010 and 2014.

Go deeper: Medicare for All is a winner in Democratic primaries.

7. Republicans' next war: Preexisting conditions

Illustration: Sarah Grillo/Axios

Republicans are continuing the repeal fight on two fronts:

  • The conservative group's proposal, a block grant that builds on last year's proposal by Sens. Lindsey Graham and Bill Cassidy, will be released in the next couple of weeks, according to Chen.
  • A lawsuit by Republican attorneys general that argues the law's individual mandate is unconstitutional — the one that led to the Justice Department's decision to stop defending the ACA. (The tax penalty has been repealed, but the mandate is technically still on the books.)

Of the two, the lawsuit is the one that's most likely to move ahead — although it's still probably a long shot.

  • Top Republicans have been in no mood to try another repeal vote after last year's failures. But conservatives argue that they should do it to energize the GOP base for the midterms.

The big problem with the lawsuit: It picks a fight over preexisting conditions. The Justice Department argued that if the mandate goes, the courts should get rid of the guaranteed coverage of preexisting conditions too, since the two provisions work together.

  • That's not a fight Republicans are excited to have, after they spent all of last year trying to convince the public that they'd still cover sick people after the ACA is gone.

Go deeper:

8. The opioid crisis: No end in sight

Illustration: Sarah Grillo/Axios

The House is voting on dozens of bills to address rampant opioid addiction— an issue that unifies lawmakers and voters like no other, and is often deeply personal.

  • This epidemic is touching more and more of us: More 40% of millennials personally know someone who has dealt with an opioid addiction, according to an NBC News/GenForward poll out Friday.
  • But Washington is still playing catch-up. Many of the changes being made by Congress and the administration are meaningful, Caitlin reports, but experts say there’s still far more to be done, especially on treating addiction.

What Congress is doing: Funding for the epidemic has drastically increased in recent years — the most recent spending bill dedicated about $4 billion to the crisis. But there are other policy changes are underway, including those being voted on in the House this month:

  • One would get rid of a ban on federal Medicaid funding for mental health treatment facilities with more than 16 beds. That might be the most significant change.
  • Some bills also create new prescription opioid policies, like requiring the Food and Drug Administration to work with drug companies on ways to return or destroy unused opioids.
  • Another proposal would allow more providers to use buprenorphine, a type of medication-assisted therapy.
  • To crack down on imported fentanyl, the House passed a bill that gives the FDA more authority to seize fentanyl arriving through international mail.

What Congress isn’t doing: Experts say states need more money over a longer period, and that the country's overall treatment infrastructure needs a significant upgrade, as most of the country is ill-equipped to deal with the epidemic.

Go deeper:

9. What's working

Illustration: Rebecca Zisser/Axios

Americans on average are dying sooner, largely due to the country’s opioid epidemic. But a number of medical advances are helping people who have chronic diseases live longer.

What’s working: Medical researchers and venture capitalists told Axios' Bob Herman that these drugs and treatments have immensely helped patients, or could change the face of medicine shortly.

  • Hepatitis C drugs sold by Gilead Sciences and AbbVie essentially eradicate the virus in as few as two months, although side effects vary.
  • Immunotherapy treatments, such as CAR-T, give patients the chance to fight off cancer with modified versions of their own immune cells.
  • New gene therapies are attacking rare disorders, such as one treatment that reverses a rare form of blindness.
  • Gene-modifying systems like CRISPR are giving scientists hope of treating disease at the DNA level.
  • Newer diabetes treatments have been shown to slow the costly and crippling long-term disease.

Be smart: The price tags are huge, and we still don’t know about all of their long-term side effects. There are always tradeoffs in health policy, but a breakthrough drug or treatment may not be all that valuable if people can’t access or afford it.

10. 1 tech thing: Your AI doctor

Illustration: Sarah Grillo/Axios

It’s not unrealistic to think that 80% of what doctors do will be replaced by algorithms and artificial intelligence, Bob tells us.

  • The idea, evangelized by venture capitalist Vinod Khosla two years ago, is that machines can more accurately diagnosis us — and that will reduce deadly medical errors and free doctors up to do other things.

The bottom line: We’re getting closer to this reality. Algorithms, for example, can already diagnose diseases from imaging scans better than human radiologists. Computers possibly could take over the entire radiology specialty.

How it works: Khosla sees a day where people will have an “AI physician to answer their questions — that will be free. Just like Google Maps is free.” 

  • That could be an app on our phones. But this goes beyond Googling symptoms.
  • Imagine going to a doctor appointment or getting an MRI. 
  • Your human doctor takes photos, enters notes or waits for the scan results, and then plugs everything into an AI platform.
  • You then receive a diagnosis and plan based on the results and your medical history. 
  • Human doctors can’t remember every possible disease, treatment or medical article. But AI doctors can.
  • Human doctors likely would be more focused on emotional support and understanding what patients need or want.

One step further: “AI physicians with human assist like a nurse could do as much as any primary care physician within a decade,” Khosla said.

  • And he has a pretty good track record. In 2004, he predicted we would use our phones for a lot more than just talking.

Thanks for diving in with us. Live coverage all weekend on Axios.com.