Jan 9, 2018

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning … and happy birthday to us! Vitals launched one year ago today. Thanks so much for coming along on this ride with us, and here’s to year two!

Alex Azar faces the Finance Committee

Senators will question Alex Azar today. Photo: Tasos Katopodis/Getty Images

Can a former pharma CEO really be trusted to bring down drug prices? That’s the theme Democrats will hammer home as Alex Azar, President Trump’s nominee for HHS secretary, heads before the Senate Finance Committee today for his confirmation hearing.

What to watch: Azar will likely face broader questioning today than he did at a courtesy hearing last year before the HELP Committee, because Finance has broader jurisdiction.

  • So, expect to hear more about the Affordable Care Act. Democrats will likely complain about “sabotage,” and Azar will likely point to strong enrollment numbers as evidence that cutting back outreach funding didn’t seem to hurt.
  • Azar has previously endorsed several long-standing Republican policy ideas, including Medicaid block grants.

But the primary focus, a Senate Democratic aide told me, will probably be on drug prices.

  • Trump’s campaign pledge to lower the cost of prescription drugs was popular, yet his administration seems unlikely to actually do much in that department.
  • Eli Lilly undertook several controversial price hikes under Azar’s leadership, including increases in the cost of insulin products.
  • During his HELP heating, Azar seemed at least conceptually open to a couple of potential changes — perhaps including a crackdown on some of the strategies drug companies use to extend their products’ patent protections.
  • However, Eli Lilly reportedly used some of those same tactics while Azar was CEO.

The bottom line: Azar will almost certainly be confirmed.

Watch live: The hearings gets under way at 10 a.m. and will be livestreamed here.

Day 1 at #JPM18

Axios' Bob Herman is out in San Francisco for the big J.P. Morgan Healthcare Conference. Here's the lowdown from Day 1:

Tax cuts led the day.

  • And there were smiles all around. Health care companies expect to use the windfalls on share buybacks and acquisitions. Almost nothing was said about higher wages, increased hiring, or keeping prices in check for patients.

Contradictory messaging from not-for-profit hospital systems.

  • Hospital executives continue to tell banks and bondholders that strong inpatient volumes are a priority, while telling the public they are committed to "value-based care" that in theory leads to fewer inpatient hospital stays.
  • Admissions in the most recent financial quarter were "a little bit softer than we wanted," said Dean Swindle, chief financial officer of Catholic Health Initiatives.
  • Adventist Health System CEO Terry Shaw highlighted his organization's focus on "acute-care growth."

Keep an eye on Florida Blue.

  • It's one of the largest insurers on the ACA's marketplaces, and has made a profit there. President René Lerer told investors the company expects to have 1.1 million ACA members this year.

Bob ran into Bob Hugin outside of an elevator.

  • Celgene's executive chairman is mulling a Senate run as a Republican. He said he hasn't made up his mind just yet, but he's not a fan of hearing people "squawk" about unqualified candidates.

Go deeper: No, seriously — they're really happy about the tax law.

Medicaid expansion helps keep hospitals open

Hospitals in states that expanded Medicaid were about six times less likely to close than hospitals in states that didn't expand the program, according to a new study in Health Affairs. This trend was stronger in rural areas.

  • This is most likely because hospitals often take on the financial burden of uninsured patients who can't pay for their care. But now, Medicaid helps pay for the care that many previously uninsured patients receive.

Why it matters, per Axios' Caitlin Owens: Republicans in Congress almost repealed Medicaid expansion last year. But hospitals' financial security — and patients' ability to access them, particularly in rural areas — is tied to the expansion.

Hospitals have lobbied states aggressively to adopt the expansion, and their prospects could brighten in some of the 18 remaining non-expansion states after this year's midterms.

Why kids stay in the hospital longer than needed

Bloomberg has a deep and depressing dive into a major failing of the U.S. health care system: Children with complex health conditions often remain hospitalized long after they’ve been cleared to go home, because there’s no system in place to provide ongoing care for them at home.

Key quote:

  • “It’s a system that penalizes society's most vulnerable, and it serves no one. Parents want their children home, hospitals need the beds for more urgent cases, and insurance companies recoil at footing enormous hospital bills.”

The catch: Home care generally costs a lot less than hospitalization — when it’s paid for at all, that is. Private insurance rarely covers it, and Medicaid pays so little that few providers will take it. That leaves the burden on parents, many of whom have had to quit working to become full-time caregivers.

Most adults on Medicaid have jobs

The majority of people who would be affected by Medicaid work requirements are already working, according to a new analysis from the Kaiser Family Foundation.

  • Among adult Medicaid beneficiaries who aren’t elderly and aren’t receiving disability benefits (the people work requirements would most affect), 60% work either full- or part-time. But their wages are low enough that they still qualify for Medicaid.
  • The most common jobs among these working poor include working in restaurants, construction, schools and (somewhat ironically) hospitals.
  • Healthier and more educated enrollees are more likely to be working.

Among those who aren’t working, a plurality — 36% — say it’s because they’re ill or disabled; 30% said it’s because they’re taking care of family.

Why it matters: The Trump administration has endorsed states’ efforts to add work requirements to Medicaid benefits, saying the program should be a safety net for the most vulnerable, not able-bodied adults.

Caitlin Owens

Correction: Yesterday’s Vitals misstated the Congressional Budget Office’s latest cost estimates for renewing the Children’s Health Insurance Program. An extension would cost roughly $800 million, not $800 billion. Big difference. I apologize for the error.

What we’re watching today: Azar.

Also, the HELP Committee holds a hearing on the opioid epidemic. (10 am; livestream).

Kentucky men’s basketball vs. Texas A&M (7pm, ESPN).

How should we celebrate our one-year anniversary? Don’t say karaoke. I hate karaoke. Send your other ideas to me at baker@axios.com