Good morning. Thanks to those of you who joined Axios yesterday for our pain management event, and especially to those of you who asked such thoughtful questions during and after.
Illustration: Rebecca Zisser/Axios
The CEOs of 177 health care companies collectively made $2.6 billion in 2018 — roughly $700 million more than what the National Institutes of Health spent researching Alzheimer's disease last year, according to a new Axios analysis of financial filings.
Why it matters: The pay packages reveal the health care system's real incentives: finding ways to boost revenue and stock value by raising prices, filling more hospital beds, and selling more drugs and devices, Axios' Bob Herman reports.
By the numbers: The median pay of a health care CEO in 2018 was $7.7 million. Fourteen CEOs made more than $46 million each.
The highest-paid health care CEO last year was Regeneron Pharmaceuticals CEO Leonard Schleifer, who made $118 million. A spokesperson said Schleifer "has built Regeneron from a start-up into a leading innovative biopharmaceutical company" and that he "generally holds his option awards until nearly the end of the full 10-year option term."
Between the lines: A vast majority of CEO pay comes from exercised and vested shares of stock. Salaries are almost an afterthought.
The Trump administration is considering requiring insurers to disclose their negotiated rates for services, which could affect insurers in the private market, the WSJ scooped yesterday.
If this happened, it would be a huge change from today's secretive pricing system. But it's unclear how well this transparency would work to bring down prices.
Photo: Nicholas Kamm/AFP/Getty Images
Axios health care editor Sam Baker is slightly obsessed with Walmart's extremely hands-on approach to its health care benefits, and he flagged this Kaiser Health News story about the latest frontier in that effort: imaging.
Driving the news: Walmart is already sending its employees to a specified set of high-quality health systems for surgery, and even covering their travel costs. But it figured out that about half of those surgeries were unnecessary, KHN reports, and traced those procedures back to errors in tests like MRIs and CT scans.
Quality ratings for imaging centers is hard to come by. Unless you work for Walmart and need a scan, it would be pretty difficult to find the highest-quality option in your area.
Our thought bubble, via Sam: Walmart seems to be doing the thing everyone else talks about — trying to save money in the long run by investing in quality up front — with rigorous metrics and research to help define it.
A bipartisan group of senators will today release the latest proposal to protect patients from surprise hospital bills, only 2 days after the House Energy and Commerce Committee leaders released theirs.
Details: Providers would be paid the difference between a patient's in-network cost-sharing requirements and the median in-network rate for their services.
What we're watching: Whether providers view this blended approach as a reasonable compromise, or whether it just makes everyone mad that they didn't get exactly what they wanted.
The Centers for Medicare & Medicaid Services put out a guidance document Wednesday that attempts to clarify how "spread pricing" with drugs should be accounted for in state Medicaid programs, Bob writes.
Driving the news: Several states, most notably Ohio, have railed against pharmacy benefit managers for using spread pricing in Medicaid. That's where PBMs charge health insurers more than what they pay pharmacies to dispense drugs, and keep the difference.
The bottom line: Spread pricing has officially attracted federal attention. This puts a giant target on the backs of PBMs that engage in the practice and puts PBMs a little at odds with the insurers that use them.
Go deeper: The data showing drug pricing games
Happy Thursday! Keep sending me tips and feedback.