Axios Vitals

A briefcase with a red cross on the front.

October 11, 2017

Good morning ... Hope you're enjoying this break from the action in the Senate. As always, feel free to drop me a line this week with your thoughts, feedback or tips. You can find me at [email protected]

Un-bending the cost curve

Former Health and Human Services secretary Tom Price wasn't a fan of the Affordable Care Act's efforts to change the way we pay for and deliver health care. And the future of those efforts is one of the big questions that keeps coming up in conversations about Price's successor.

The issue: The ACA included several programs that all tried to point the health care system in the same direction — encouraging doctors, hospitals and other providers to better coordinate their services, rather than making separate payments to each person and for each test or procedure. But the Trump administration has rolled back some of those programs.

  • It has dialed back the ACA's Medicare and Medicaid "Innovation Center," making voluntary some payment experiments that were previously mandatory.
  • Seemingly minor changes in these programs can have big financial impacts, as this Bloomberg story illustrates: Unraveling a single program focused on hip and knee replacements could cost the government some $90 million over three years.

What they're saying: Many health care analysts and lobbyists saw Price's hand in some of those rollbacks, which they attribute to his experience as an orthopedic surgeon — a lucrative specialty whose practitioners often aren't too eager to see their payments restructured and likely reduced. Some cost-control advocates — including people who work with insurers — are hoping a new secretary would breathe new life into these programs.

Yes, but: These changes came from Price and from Seema Verma, who oversees Medicare, Medicaid and parts of the ACA — and who's seen as a leading candidate to replace Price. And many congressional Republicans share their belief that HHS shouldn't be forcing certain providers to be the guinea pigs for experimental payment models.

​CHIP vote delayed

House Republicans say they will delay a floor vote on their bill to reauthorize the Children's Health Insurance Program, as they try to reach a deal with Democrats about how to pay for the measure.

  • "But let's be crystal clear: with multiple state CHIP and public health programs on countdown clocks, if the minority wants to reach a bipartisan agreement, time is of the essence," Energy and Commerce Committee chairman Greg Walden said in a statement.

What's next: A CHIP bill will likely be on the House floor after the representatives return from next week's recess.

Why it matters: Federal funding for the program expired Sept. 30, and though states have some cash left over, they've said Congress needs to move quickly to prevent children from losing coverage.

Gottlieb skirts HHS speculation

Scott Gottlieb, the commissioner of the Food and Drug Administration, gave the classic Washington neither-yes-nor-no answer yesterday when Reuters asked him about the speculation that he might succeed Price.

  • "I feel like I want to continue to follow through on the policies we've put out and it's where I think I can be most effective," Gottlieb said.
  • Asked whether the White House had approached him about the job, Gottlieb said: "I'm not going to get into private discussions I might have had around that."

Be smart: The chatter about Gottlieb is mostly positive. It's a big jump from FDA to HHS, where he would also oversee Medicare, Medicaid and the ACA — maybe too big. But there's definitely a pro-Gottlieb camp, and even some Democrats have told me they're impressed with his tenure at FDA so far.

​Puerto Rico's health care system is still in crisis

Seriously ill patients across Puerto Rico still can't get access to the care they need, more than two weeks after Hurricane Maria tore through the island.

The biggest problem, according to the New York Times, is the lack of electricity.

  • Hospitals don't have enough diesel fuel to run their generators, and as a result have had to evacuate their patients.
  • Patients have died, the Times reports, after losing power for their oxygen tanks and ventilators.
  • Dialysis patients have had their treatments reduced from 12 hours a week to nine, also because there's not enough fuel to keep generators running.

And though the U.S. has dispatched the USNS Comfort, which can treat up to 250 people, Puerto Rico's health department has sent just 82 patients to the ship.

​DaVita's reliance on charity-funded premiums

We now know how much DaVita, the giant operator of dialysis facilities, relies on patients with commercial insurance subsidized by a charity. And it's significant, Axios' Bob Herman reports.

  • Roughly 13% of DaVita's dialysis patients (or 25,000 people) get premium support through the American Kidney Fund, a charity that gets tax-free donations from DaVita, the company said Tuesday.
  • About 4,000 of those patients get premium help for traditional employer coverage, and 1,800 get subsidies for ACA premiums.
  • DaVita benefits because patients keep private coverage, which pays significantly more than Medicare and Medicaid.
  • Charity-funded patients account for about $540 million of DaVita's annual operating profit.
  • Gary Taylor, a health care analyst at J.P. Morgan, crunched the numbers further and said those patients equate to about 61% of DaVita's estimated pre-tax profit for 2016.

Go deeper:

DaVita's disclosure lines up almost exactly with this piece of financial sleuthing from the

Southern Investigative Reporting Foundation

, which estimated in September that up to half of DaVita's operating profit comes from the American Kidney Fund "gravy train."

What we're watching today: House Energy and Commerce oversight subcommittee hearing on the 340B drug discount program. (Hearing begins at 10 am, details and livestream here.)

Energy and Commerce's health subcommittee hears testimony about the opioid crisis (10:15 am, livestream here).

What we're watching this week: Trump's executive order.