Jan 23, 2020

Axios Vitals

Good morning.

Today's word count is 813 words, or a 3-minute read.

1 big thing: Trump's selective urgency at the Supreme Court

Illustration: Rebecca Zisser/Axios

When the Trump administration urged the Supreme Court not to expedite an appeal in the big case challenging the Affordable Care Act, it was breaking with the tactic it has taken in many other high-profile cases, Axios' Sam Baker writes this morning.

The big picture: The Supreme Court almost never takes up cases before a lower appeals court has had the chance to rule. But the Justice Department, under President Trump, has asked for a whole lot of exceptions to that rule.

  • It sought expedited Supreme Court action in lawsuits over the administration’s travel ban, its efforts to end the DACA immigration program, its changes to the 2020 Census, and the Pentagon’s ban on transgender troops.
  • In many of those cases, the Trump administration has argued that lower-court rulings invalidating a federal policy are simply too pressing to leave to the normal process, which can take years.

Yes, but: In the challenge to the ACA — in which a district court judge struck down the entire health care law — the Justice Department urged the Supreme Court not to expedite a hearing.

  • “This is just the latest example, to me, of the seeming inconsistency in the federal government's position toward the need for expedition in the Supreme Court,” said Steve Vladeck, a law professor at the University of Texas who recently wrote a Harvard Law Review article about these timing considerations.

Expedition isn't always wrong, legal experts say. And in the ACA case, nothing out of the ordinary is happening.

  • It's the selectivity with which DOJ seeks to expedite some cases, while letting others play out on a longer timeline, that has raised some eyebrows.
  • "It's easy to look at the pattern and find a lot of political calculations as opposed to legal ones," Vladeck said.
2. Centene and WellCare complete giant merger

Centene and WellCare have cleared all federal and state antitrust reviews, and today they expect their merger will be finalized — combining them into the largest health insurer by membership, with 23.4 million covered people.

Why it matters: The health insurance industry will get a lot more consolidated with this deal, and competition will decline within state Medicaid programs and among federal Medicare plans, Axios' Bob Herman reports.

The big picture: A combined Centene and WellCare essentially will function as a branch of state and federal governments, because almost all of its $100 billion in annual revenue flows from taxpayer-funded health care programs.

  • Two-thirds of revenue will come from Medicaid, where Centene and WellCare serve as the insurance gatekeepers for low-income people in 30 states.
  • A growing portion of the combined company's revenue will stem from private Medicare Advantage plans and Medicare prescription drug plans.
  • WellCare doesn't sell any plans in the Affordable Care Act marketplaces, but Centene is the largest ACA insurer. Taxes subsidize a vast majority of those ACA premiums.

Between the lines: Centene had to sell some of its Medicaid and Medicare plans to alleviate competitive concerns raised by antitrust authorities, but those assets are just getting shifted to other dominant insurers.

  • CVS Health is buying Centene's Medicare and Medicaid plans in Illinois, and Anthem is buying WellCare's Medicare and Medicaid plans in Missouri and Nebraska.
  • Health insurance is all about scale, and the biggest players are getting bigger.
3. Blues plans invest in new generic drug company

18 Blue Cross Blue Shield insurers are investing a combined $55 million to build a new generic drug company as a subsidiary of the nonprofit Civica Rx. The firm will focus on manufacturing generics people get at the pharmacy, Bob reports.

Between the lines: Civica and the Blues aren't disclosing which drugs they want to make, so it's unclear how much effect this company will have. But the investment highlights the broad desire to counter generic companies that are accused of price-gouging.

What they're saying: The new company is evaluating a list of 30 to 40 generic drugs that have little or no competition and are deemed to be "high-priced," Civica CEO Martin VanTrieste said.

  • "If you're in the supply chain and you're causing that artificially high price, you should be concerned," VanTrieste said.

Yes, but: Pharmacies have contracts with wholesalers that usually require them to buy a vast majority of their drugs from that wholesaler.

  • Veering outside of that system, even to get cheaper drugs, may not be easy, and may not guarantee quick access to those drugs.
  • However, the Blues plans are now trying to recruit retailers and pharmacies to join and buy the generics that will start rolling out in 2022.

The bottom line: Civica has already started distributing hospital-based drugs. This effort similarly hinges on which drugs are targeted and how cheap Civica's new subsidiary can make them.

4. Physician gender pay gap still a mystery

The gender pay gap among physicians is widening, and researchers are struggling to understand why the difference in the average starting pay is more than $36,000, Axios' Marisa Fernandez writes.

By the numbers: The data compiled from 1999 to 2017 shows the average starting compensation was $235,044 for men and $198,426 for women, with a larger gap in more recent years.

  • Still, about 60% of the unadjusted gap in starting salary could be from "differences in specialty and hours spent in patient care."

Go deeper: Add-on expenses for medical students pile up

5. 1 alternate reality thing

HHS Secretary Alex Azar. Photo: Alex Wong/Getty Images

Had last year's feud between Health and Human Services Secretary Alex Azar and Centers for Medicare and Medicaid Services Administrator Seema Verma resulted in one of them being forced out, the White House had a list of potential replacements ready, Politico scoops.

The list:

  • Former FDA Commissioner Scott Gottlieb
  • Adam Boehler, a former top HHS official
  • White House Domestic Policy Council Director Joe Grogan
  • Eric Hargan, the deputy HHS secretary
  • Paul Mango, HHS deputy chief of staff

Yes, but: Politico's sources stressed that both Azar and Verma are expected to stay in their jobs through at least the end of President Trump's first term.