Happy midweek. Today's newsletter is 962 words or a 3.5-minute read.

1 big thing: Grappling with Change fallout

Photo: Mike Bradley/Bloomberg via Getty Images

During the first congressional hearing on the Change Healthcare hack Tuesday, lawmakers appeared to zero in on the risks of massive consolidation in health care, Tina writes.

Why it matters: There was some bipartisan agreement among lawmakers that the bulking up of health care giants like Change parent company UnitedHealth Group has left the system and patients worse off.

What they're saying: "This just another another thing that's happened with the massive vertical integration in our system that I believe personally is not in the best interest of the American people," said Rep. Larry Bucshon (R-Ind.) during a hearing of the House Energy and Commerce health subcommittee.

  • "I'm concerned that there are fewer redundancies in our system and more vulnerability to the entire system if entities like UnitedHealth Group are compromised," said Rep. Frank Pallone (D-N.J.).

Catch up quick: The late February attack against Change Healthcare, the country's largest medical claims processor, rippled across the industry, halting payments and crippling operations at some hospitals and clinics.

The big picture: Though Congress is still in the early stages of figuring out a possible response, lawmakers' comments suggested support for cracking down on vertical mergers that have allowed companies to expand their reach in the health care system.

  • The Federal Trade Commission issued new merger guidelines last December that lowered the threshold for proving a merger may be anticompetitive.
  • Experts yesterday suggested regulators also consider whether health care deals would create new vulnerabilities in the event of a cyberattack.

The other side: UnitedHealth CEO Andrew Witty told investors yesterday that the company's size was an asset in its response to the attack.

  • "Without UnitedHealth Group owning Change Healthcare, this attack would likely still have happened and it would have left Change Healthcare, I think, extremely challenged to come back," he said.

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2. CVS workers move to unionize

Illustration: Sarah Grillo/Axios

Pharmacists at CVS stores are moving to join a new union as part of a growing backlash to what they say are unsafe work conditions, Maya writes.

Why it matters: The new unionization effort comes months after pharmacy workers at major retailers staged walkouts in response to understaffing and growing workplace demands that they warn are putting patients' health at risk.

Driving the news: Pharmacists at two CVS locations in Rhode Island, where the conglomerate is headquartered, filed to unionize with the Pharmacy Guild.

  • The Las Vegas branch of CVS subsidiary Omnicare, which fills prescriptions for nursing homes, became the first location to file its paperwork with the new union last month.
  • The Pharmacy Guild is the first union dedicated to representing pharmacies, though thousands of industry workers are unionized through other groups.

The other side: "We respect our employees' right to either unionize or refrain from doing so," CVS spokesperson Amy Thibault said in a statement.

  • CVS has invested about $1 billion in wage increases since 2021 and made other training and recruiting improvements, Thibault added.

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3. Generational tobacco ban advances

A smoker vapes in central London. Photo: Tolga Akmen/AFP

A pioneering tobacco ban aimed at creating Britain's "first smoke-free generation" cleared a key hurdle in Parliament over objections it would fuel a black market and snuff out personal choice, Axios' Adriel Bettelheim writes.

Why it matters: The plan effectively makes it illegal to ever sell tobacco or vapes to anyone who turns 15 this year or younger. New Zealand approved a similar ban, but it was repealed by a new government there in February.

Catch up quick: UK Conservative Prime Minister Rishi Sunak made passage of the ban a legacy issue as his party faces a likely blowout in an election year.

  • Once it takes effect in 2027, no sales will be allowed to anyone born after Jan. 1, 2009, and the smoking age will rise by one each year.
  • The plan also takes aim at youth vaping, through steps like banning the sale of inexpensive, disposable vapes and limiting flavor options.

Driving the news: The House of Commons voted 383-67 to advance the bill on Tuesday amid praise from public health officials and the opposition Labour Party, ABC News reported.

More here

4. Money-saving ACOs

Illustration: Natalie Peeples/Axios

Certain types of accountable care organizations tend to do a better job of saving Medicare money, congressional scorekeepers surmised in a new report.

Why it matters: Over a decade into Medicare's push to tie provider payment to cost and quality targets, savings from ACO programs still represent a fraction of program spending.

What they found: ACOs led by independent physician groups have produced "substantially larger" savings than those led by hospitals, the Congressional Budget Office wrote, citing several studies.

  • Independent practices have clear incentives to reduce hospital care, which means savings, CBO wrote. It said the incentives are a bit more muddled for hospital-led ACOs, since reduced admissions would mean less revenue to cover fixed costs.
  • And compared with independent physician practices, hospitals have less ability to control the types of services providers are offering.
  • ACOs with a larger proportion of primary care physicians were also more likely to produce greater savings.

Zoom in: The CBO report also suggested ways to make ACO participation more attractive to providers — or make it tougher to refuse, like by barring those who don't participate from receiving federal drug discounts in the 340B program.

5. Catch up quick

🩸 New blood tests that can pick up on signals of possible cancer may mark a new chapter in cancer detection, especially for "silent" forms of the disease. (Washington Post)

🌏 Hoping to prevent the next pandemic, the Biden administration will help 50 countries identify and respond to infectious diseases. (Associated Press)

🇨🇳 The Chinese government continues to subsidize production of illicit fentanyl materials, a congressional committee found. (Axios)

💵 Small cash incentives could help people fight stimulant addiction, but stigma has prevented wider adoption of such programs. (CNN)

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