Dec 5, 2019

Axios Vitals

Good morning. Today's word count is 896, or ~3.5 minutes.

1 big thing: Hospitals vs. the world

Illustration: Lazaro Gamio/Axios

Hospitals sued the Trump administration yesterday over its requirement that they disclose their negotiated rates, the latest of the industry's moves to protect itself from policy changes that could hurt its revenues.

Why it matters: Hospitals account for the largest portion of U.S. health costs — which patients are finding increasingly unaffordable.

The big picture: Hospitals are going to war against Trump's price transparency push while simultaneously trying to kill Democrats' effort to expand government-run health coverage.

  • The industry is one of the main forces behind the Partnership for America's Health Care Future, the group that's gone on offense against "Medicare for All" and every other proposal that would extend the government's hand in the health system, as Politico recently reported.
  • It's also emerging victorious from blue states' health reforms so far, which all started as proposals much more threatening to hospitals than the watered-down versions that eventually replaced them.

Between the lines: The industry has a lot to lose; even non-for-profit systems are, as my colleague Bob Herman put it, "swimming in cash."

  • The Trump administration's transparency measure could lead to either more pricing competition or further regulation, if it exposes egregious pricing practices.
  • And Democrats' proposals often feature government plans that pay much lower rates than private insurance does.

Hospitals argue that the transparency measure could end up raising prices if providers with lower negotiated rates see what their competitors are getting. They also warn that Democrats' plans could put hospitals and doctors out of business and threaten patients' access to care.

The bottom line: Politicians are reacting to patients' complaints about their health care costs, but the industry has historically been excellent at getting its way.

Go deeper: Hospitals winning big state battles

2. New details on TeamHealth's surprise bills
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Data: TeamHealth letter to senators; Note: Numbers don't include Blue Cross Blue Shield insurers; Chart: Axios Visuals

Physician staffing firm TeamHealth sent thousands of surprise medical bills to patients in 2017, a strategy used to obtain higher payment rates from insurers, according to a letter from the company sent to a group of senators in March, which was obtained by Axios.

Why it matters: These bills can be unaffordable for the small portion of TeamHealth's patients who receive them, and the subsequently high in-network rates raise premiums for everyone.

By the numbers: In the letter, TeamHealth president and CEO Leif Murphy reported balance billing 0.16% of patients overall in 2017, but that includes patients who have government insurance.

  • Among those with private coverage, 0.71% received balance bills. And among those patients who had commercial coverage but were out of network, 3.57% were balance billed.
  • The average balance bill in 2017 was $529.

In the same letter, Murphy said TeamHealth provides emergency care to 16 million patients a year, and 26% of its patients have commercial insurance. If 0.71% of them receive balance bills, that's nearly 30,000 people.

How it works: "Balance billing yields immaterial revenue for TeamHealth," Murphy wrote in the March letter. "Rather ... balance billing is our only available source of contract negotiating leverage."

  • That leverage leads to in-network rates that are multiple times what Medicare pays.

Yes, but: TeamHealth says it no longer practices balance billing.

  • "TeamHealth has a longstanding policy against balance billing," Blackstone, which acquired TeamHealth in 2017, wrote in a letter to the Energy and Commerce Committee in October.
3. More drugs being tested for carcinogens

Illustration: Eniola Odetunde/Axios

Health regulators around the world — including the FDA — are investigating whether metformin, a popular drug used to treat Type 2 diabetes, contains unsafe amounts of NDMA, a carcinogen, Bloomberg reports.

What they're saying: "The agency is in the beginning stages of testing metformin," an FDA spokesman told Bloomberg in a statement. "However, the agency has not confirmed if NDMA in metformin is above the acceptable daily intake (ADI) limit of 96 nanograms in the U.S."

  • The European Medicines Agency has also urged companies to test for high levels of NDMA in metformin.

Context: Concerns about NDMA have been increasing since it was found in blood pressure drugs and those containing ranitidine.

Yes, but: This news isn't necessarily bad, former FDA commissioner Scott Gottlieb told me.

  • "There's likely to be more reports of regulatory efforts to look for these risks, and perhaps additional findings," he said. "Because we're now more focused on mitigating these theoretical risks. That's not necessarily a bad thing. Our expectation of safety and our ability to control for it has increased."
4. Good news for HIV-positive babies

Antiretroviral drugs, administered within days of birth, appeared to bring HIV in newborns down to undetectable levels, Axios' Marisa Fernandez writes.

Why it matters: About 500 babies in sub-Saharan Africa are born with HIV every day, NPR reports. Though these early-treated children are not cured yet, researchers' recent study published in Science Translational Medicine shows encouraging results from a clinical trial in Botswana.

  • "It's likely that we may have set them up for the possibility of long-term remission of their HIV," Daniel Kuritzkes, co-author of the study, told NPR.

Previous trials have given babies an antiretroviral therapy months after birth, which left about 200 times more of the virus in their blood.

  • Arguments have been made that the drugs are too powerful for newborns.
  • Doctors are still pushing for more clinical evidence that the treatment can be safe and more effective than delaying treatment.
5. A big clue for 2021 Medicare Advantage plans

Spending levels for people in the traditional Medicare program are expected to rise by 4.5% in 2021, the Centers for Medicare & Medicaid Services said in a memo sent this week.

Why it matters: This growth rate is the key number government actuaries use when figuring out how much to pay Medicare Advantage plans, Bob writes.

  • A 4.5% rate "is a very strong starting point for reimbursement and a continued reflection of a MA-friendly Republican administration," health care analysts at Barclays wrote to Wall Street investors.
  • The early estimate also is almost always revised higher once final rates are released in April, meaning another large pay raise is in store for insurance companies that sell MA plans.

Go deeper: The war over Medicare Advantage audits heats up