Feb 28, 2020

Axios Vitals

Good morning.

Situational awareness: The U.S. is facing its first coronavirus-related drug shortage, CNN reports.

🚨 "Axios on HBO" returns with a bang: Roger Stone on his Christian salvation (clip); an in-depth interview with Weinstein prosecutor Cy Vance; and Kerry, Dukakis, others on Super Tuesday drama — Sunday 6pm ET/PT.

Today's word count is 888, or a 3-minute read.

1 big thing: The latest on the coronavirus

President Trump during Wednesday's coronavirus press conference. Photo: Chip Somodevilla/Getty Images

1. The Department of Health and Human Services sent more than a dozen workers to receive the first Americans evacuated from Wuhan without training or protective gear, according to a whistleblower complaint reported by the Washington Post.

  • Why it matters: These specific workers may have gotten lucky and avoided catching the novel coronavirus, but in general this would be a pretty effective way to start spreading it — and HHS definitely should know better.

2. Scientists and experts from the Centers for Disease Control and Prevention and the National Institute of Health have been instructed not to speak to the press regarding COVID-19 without White House clearance, the New York Times reports.

  • That includes officials like the NIH's Anthony Fauci, and others with both deep scientific understanding and plenty of experience talking to the press.

3. California confirmed 33 more cases, some whom came from the Diamond Princess cruise ship or Wuhan, Gov. Gavin Newsom confirmed Thursday.

4. Testing is getting better — 40 state and local health departments are finally able to conduct their own tests for the virus, up from 13 due to the flawed kits sent out weeks ago. Another 93 jurisdictions will receive the kit by Monday, per HHS.

5. Mass gatheringsCarnival, religious pilgrimages and the Winter Olympics — have countries on high alert for possible spike in person-to-person spread.

— Compiled by Axios' Marisa Fernandez

2. The growing coronavirus recession threat

Illustration: Aïda Amer/Axios

In just a matter of weeks, top economists and investment bank analysts have gone from expecting the coronavirus outbreak to have minimal impact on the U.S. economy to warning that an outright recession may be on the horizon, Axios' Dion Rabouin reports.

What's happening: The spread of confirmed coronavirus cases in Europe, the Middle East and the U.S., and the speed at which they are being discovered, has set the table for the outbreak to have a larger and much costlier impact on the U.S. and the rest of the world.

Between the lines: The outbreak threatens consumer-oriented businesses like restaurants, bars and travel, which have held up the U.S. economy as business investment has turned negative and the manufacturing sector has fallen into recession, largely as a result of the U.S.-China trade war.

What they're saying: Business investment, which had declined through the last three quarters of 2019, could be further hit, Constance Hunter, chief economist at KPMG, tells Axios.

  • "If the virus spreads within the U.S. in any meaningful way, that is going to have a negative impact."

Go deeper.

3. Teladoc's coronavirus bump

Fears about the coronavirus haven't shattered every stock. Look at the telehealth firm Teladoc, Axios' Bob Herman writes.

Driving the news: Teladoc's stock price has soared 19% this week and is now valued at almost $10 billion, because apparently Wall Street believes we will only see doctors on our iPads or on the phone as we avoid the outside world.

Reality check: Teladoc is getting more people to use digital checkups, but the company is not remotely close to turning a profit.

  • Teladoc lost about $100 million in 2019, which was roughly the same loss as 2018.
  • Teladoc is still spending 20% of its revenue on advertising and marketing.
  • Teladoc has had major accounting problems.
  • And there are still concerns telehealth visits don't save money and instead are precursors to in-person clinic visits.
4. Coronavirus adds stress onto states

State health agencies already had enough problems, and now they face the prospect of the coronavirus — which would further stretch their limited resources, Politico reports.

Between the lines: State and local health departments are underfunded and already trying to address a bad flu season, vaping-related illnesses and the opioid epidemic.

  • The CDC's budget for state and local emergency preparation was cut by a third between 2003 and 2019.

Details: State and local officials are stocking up on medical supplies, making quarantine plans and even preparing to postpone work on long-term problems like addiction should an outbreak hit.

The big picture: "The officials say it's part of a longstanding pattern in both red and blue states: agencies that routinely are the stepchildren in state government being suddenly thrust into a new emergency with tight budgets and multiple missions," Politico writes.

5. FTC sues to block hospital system merger

The Federal Trade Commission and Pennsylvania's attorney general want to block the proposed merger between Jefferson Health and Einstein Health Network.

  • It's arguing that the combined system would control too much of the hospital services market in the Philadelphia area and consequently would have unfair pricing power, Bob reports.

Why it matters: Yesterday was the first time in more than three years that the FTC has challenged a large hospital merger, and this action could force Jefferson and Einstein to abandon their plans.

Flashback: The FTC hasn't opposed a major hospital merger since 2016, when it urged Tennessee and Virginia officials to block the merger between Mountain States Health Alliance and Wellmont — a deal that ultimately went through and created what's known today as Ballad Health.

  • The FTC last formally challenged hospital mergers in court in 2015, when it went on a spree against hospitals deals in West Virginia, Pennsylvania and Illinois. Two of those three merger proposals ultimately folded.

What they're saying: Jefferson and Einstein would control 60% of inpatient services in northern Philadelphia and at least 70% of inpatient rehab services in the broader Philadelphia area, the FTC said.

  • The systems sent a statement saying they believe they have a "strong and comprehensive case" as to how the merger would benefit patients and not reduce competition.
  • A trial will start in September.
6. Seniors' loneliness epidemic

We're failing to address seniors' social isolation, a serious public health threat, according to a new report by the National Academies of Sciences, Engineering and Medicine.

Details: The report concluded that almost a quarter of Americans 65 and older who live in community settings have few relationships or infrequent social contact, the Wall Street Journal reports.

  • Research has shown that isolation is associated with an increased risk of early death.

It calls for HHS to create a national resource center for treating the issue, and for health care providers to monitor their patients for signs of loneliness.

  • It also said that Medicaid and private insurance, which are already increasingly addressing social determinants of health, should also address loneliness and isolation.