Aug 7, 2017

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning ... Sam Baker is off for a while, so I'll guide you through the next few weeks of health care. If it's quiet, like we hope it will be, Vitals will be shorter and we'll just bother you with the few things that you need to know.

Warning: Those cool new devices and procedures aren't free

Bob Herman takes a close look this morning at all of those press releases from hospitals and health care organizations that try to amaze us with the latest new procedures or devices. The marketing intent is clear — they want to attract patients to their facilities or get the word out on their new technology. The one thing they don't talk about: the price.

Why it matters: Adopting new technologies contributes a lot to the growth of health care spending. To battle that growth, the health care industry promotes price transparency as a way to encourage competition and lower spending. However, most hospitals and providers really don't embrace price transparency, and continue to advertise the latest procedures with seemingly little regard for costs.

Read more here.

The latest in repeal fallout

We're going to be dealing with this for a while, so here's what people are saying about the collapse of the repeal effort and what might be next.

What you need to know:

  • Senate Majority Leader Mitch McConnell told reporters in Kentucky that he wants to see "real reforms" out of the Affordable Care Act stabilization bill Lamar Alexander and Patty Murray are going to write, per the Associated Press: "If the Democrats are willing to support some real reforms rather than just an insurance company bailout, I would be willing to take a look at it."
  • Republican Sen. Thom Tillis said on ABC's "This Week" that the cost-sharing reduction payments to insurers might have to be phased out, but not ended right away: "In an ideal world I would like to see them go away overnight, but we don't live in an ideal world. If we don't provide some glide path downward, it will have the effect of raising insurance premiums."
  • Ohio Gov. John Kasich on CBS's "Face the Nation," on the key to getting a bipartisan agreement on an ACA rewrite: "Democrats are going to have to get to the point where they say, let's let the market work, give people more choice, bring down the cost of health insurance. And Republicans are going to have to admit that there's going to be a group of people out there who are going to need help."
  • ICYMI: Friday's clickiest health care story by my Axios colleague Alayna Treene: A Republican donor is suing the GOP for raising money on ACA repeal and then not doing it.

What you can ignore:

  • Every Republican who says "this issue isn't going away" — as Vice President Mike Pence did on Friday, when he declared that "this ain't over." It's technically true, but until Sens. John McCain, Susan Collins or Lisa Murkowski changes their vote, it's also meaningless.
CHIP's bipartisan history

On Saturday, the Children's Health Insurance Program turned 20 years old, which will make you feel really old if you were there for its passage (like I was). Here's the thing that might make its reauthorization easier this year: It was a bipartisan team effort between Republican Sen. Orrin Hatch, who's still around, and the late Democratic Sen. Ted Kennedy. It was a bit of a compromise after another big health care failure, the collapse of Bill Clinton's health care plan.

So the fact that Hatch will be steering the reauthorization this year, and has a vested interest in making sure the program succeeds, might help prevent it from getting bogged down in ideological amendments. Both sides insist they want to keep the bill "clean" so it can pass quickly. That's hard to do, but maybe the odds are improving.

Your must-read stories from the weekend

The first one comes from the Wall Street Journal's Jonathan Rockoff, who looks at why people aren't really buying the generic version of the EpiPen even after all of the backlash against the huge price increases. The reason? Middlemen, including pharmacy benefit managers, can make more money off the pricier branded version — so there's no incentive to steer people toward the generic.

The second is from Charles Ornstein of ProPublica and Katie Thomas of the New York Times, who look at the puzzling trend of insurers refusing to cover the generic version of a drug — and find that it's because some pharmaceutical companies are cutting deals that promote the brand-name medications, like the attention deficit disorder drug Adderall XR.

Why it matters: Anyone with a high-deductible plan is going to have to pay more out of pocket in these situations. But it's not just about the cost to patients. It's also about the cost to insurers — because they end up paying more when people could have used the generic. We're going to hear a lot about these kinds of arrangements if the drug prices debate ever gets going in Congress.

Tougher pay future for Medicaid plans?

WellCare Health Plans, a company with 2.8 million Medicaid plan members, piled on the health insurance earnings bonanza by raking in profit that was above Wall Street's expectations. But Bob reports that WellCare CEO Ken Burdick had this to say about the impact of potentially lower Medicaid payments at the tail end of his company's earnings call on Friday:

"It's certainly not going to get any easier. Potentially it could get a little tougher…it's important that a company be fully committed and focused on this business because it's very tough to do as a hobby given the thin margins."Between the lines: Republicans, including many governors, have made it clear lately they are not entirely opposed to cutting Medicaid funding. States that continue to struggle with their budgets could seriously consider lowering payments to the insurers that run Medicaid programs.

While you were weekending...
  • Axios Future of Work editor Steve LeVine rounds up excerpts from the letters he's received about the opioid epidemic, including this searing observation from a paramedic: "I have never once met a drug addict who was upset about the drugs being too potent."
  • Molina Healthcare won $52 million on Friday in its lawsuit over the ACA risk corridor payments it didn't get, Bob reports — but it will have trouble collecting any of the money until Congress appropriates the funds.
  • Organizing for Action's post-repeal health care agenda, per Politico: "They're showing up to cheer for John McCain, Susan Collins and Lisa Murkowski, and yell at people like Jeff Flake and Dean Heller."
Caitlin Owens

One weird goof from Wednesday's Vitals: We mentioned that the Healthcare Leadership Council had hired Akin Gump Strauss Hauer & Feld. That actually happened in October 2016, but for some reason the registration filing wasn't added to the federal lobbying database until last month.

What we're watching this week: National Association of Insurance Commissioners summer meeting in Philadelphia, Aug. 6-9.

What we're watching in September: Senate HELP Committee hearings on bipartisan ACA stabilization bill, week of Sept. 4. Also, Senate Finance Committee hearing on CHIP reauthorization, same week.

Shout if you've got worthy health care news that we're missing: