Axios Vitals

A briefcase with a red cross on the front.
September 19, 2017

Good morning ... Y'know, if we're going to be stuck living in the political version of "Groundhog Day," we should at least get to hang out with Bill Murray. Give us something.

What's missing from Graham-Cassidy

Throughout this summer's effort to repeal and replace the Affordable Care Act, Republican senators outlined a treasury of specific provisions they needed to see tweaked, added, or eliminated in order to win their support.

The latest effort, from Sens. Lindsey Graham and Bill Cassidy, addresses almost none of them. Here's a quick rundown of some one-time "must-haves" that have gone missing from this bill:

  • A soft landing: Republicans went back and forth last time about how to gradually phase out the ACA's Medicaid expansion; which formula to use in setting new caps on the program's spending; and how to make new premium subsidies more generous. Graham-Cassidy comes with a steep cliff after which all funding for both the subsidies and Medicaid expansion would disappear.
  • Opioid funding: A former must-have for moderate Republicans, this is not in the new bill at all.
  • Taxes: Conservatives like Sens. Tom Cotton, Pat Toomey, and David Perdue have complained about the ACA's taxes for years. Graham-Cassidy would leave many of the ACA taxes in place (a big reason why Sen. Rand Paul opposes it).
  • Pre-existing conditions: Any number of Republican senators said they wanted to retain the ACA's protections for people with pre-existing conditions. Graham-Cassidy would let states waive parts of those regulations.
  • Coverage estimates: The Congressional Budget Office said yesterday it will be able to determine whether the bill would meet the Senate's budget rules, but could not deliver estimates in time next week about its effects on premiums, the federal deficit, or the number of uninsured Americans.
  • A clear path through the House: The House has way more Republicans from blue states than the Senate does. Some representatives from New York have already raised concerns, and we're sure to hear more from lawmakers from California, New Jersey, Michigan, and other states.

The Senate dilemma on Graham-Cassidy

Arizona Gov. Doug Ducey shook up Washington yesterday with a statement that endorsed Graham-Cassidy in pretty strong, unequivocal terms. But just a few hours later, Arizona Sen. John McCain was still sounding pretty down on the bill, returning to his concerns about process and partisanship.

What's changed:

  • Because of McCain's deference to Ducey's judgment, the governor's statement was legitimately a big deal. Graham-Cassidy would divert a lot of federal money away from Arizona, and would almost certainly increase the number of residents without health insurance. The fact that Ducey signed off anyway, in such strong terms, was a shot in the arm to the bill.
  • Sens. Ron Johnson and Orrin Hatch announced they'll hold hearings on the bill next week. Holding a hearing after a bill is written and has to pass in a few days is a lot different from holding hearings where the testimony can inform your legislation, but it's clearly another effort to win over McCain.

What hasn't:

  • None of the three senators who voted against the final repeal bill this summer — Susan Collins, McCain, and Lisa Murkowski — is a "yes" on Graham-Cassidy, at least for now.
  • And the new "no" — Sen. Rand Paul — reiterated last night that he's still opposed.
  • Republicans' central argument still boils down to: This is our shot. The momentum behind Graham-Cassidy is not coming from the substance of the bill. It's coming from the looming Sept. 30 deadline. Maybe this time, manufactured deadline pressure will be enough to get 50 senators on board. It wasn't before.

A boost for Alexander: One side effect of Graham-Cassidy's momentum, as Axios' Caitlin Owens points out: It'll put more pressure on Democrats to strike a deal with Sen. Lamar Alexander to stabilize the ACA. Fear of Graham-Cassidy could give Democrats a pretty strong incentive to swallow Alexander's more minor changes in the hopes of showing McCain that a bipartisan alternative is viable.

As if on cue: A senior Democratic aide told Caitlin last night that Sen. Patty Murray has agreed to “significant state flexibility" to get closer to a deal.

Costs rise for employer coverage

Costs are rising in employer-based health plans, according to new data from Mercer. Early responses to Mercer's survey of employer plans point to a 4.3% rise in per-employee costs — the biggest since 2011. Underlying health care costs have grown faster, but employers have responded with a shift toward lower-premium, higher-deductible policies.

Why it matters: More than 150 million Americans — about half the country — are covered by employer-sponsored insurance.

What's next: We'll get a fuller picture of the changes in employer-sponsored coverage when the Kaiser Family Foundation releases new data later today.

How to grade a health care system

A handful of health policy wonks over at the New York Times' Upshot got together and tried to determine, via a tournament-style elimination challenge, which country has the best health care system in the world.

The winner: Switzerland — whose system has a lot in common with the ACA. (Unlike its single-payer neighbors, Switzerland relies on highly regulated, mandatory private insurance.) The experts gave it high marks for access and outcomes, and said its higher costs seemed to be worth it.

Go deeper: Harvard professor Ashish Jha, one of the experts who participated in the NYT's experiment (and who voted for Switzerland as the best system in the world), wrote a separate piece on his own, breaking down the objective markers we can use to measure access, quality and innovation. Keep the tab open for a good coffee-break/lunchtime/anything-but Graham-Cassidy read.

Single-payer system: Lanhee Chen, the policy director to Mitt Romney's 2012 presidential campaign, has an op-ed in the NYT today with ACA ally Micah Weinberg arguing that single-payer's proponents often overstate how well it works.

Mega-merger update

Catholic Health Initiatives and Dignity Health have been kicking the tires on a possible merger for almost a year now. Axios' Bob Herman reports CHI provided an incremental update to bondholders: The two parties "are in the final stages of the due diligence process…and are pleased with the progress made to date."

Between the lines: Both sides have been tight-lipped about the deal — one of the largest pending in health care right now. It's plausible the systems will give it a go since they don't have many overlapping hospitals. The combined not-for-profit system would have almost $28 billion of annual revenue, making it larger than companies like McDonald's.

One number to keep in mind: $957 million. That's how much money CHI has lost in its last two fiscal years. Cost-cutting measures, such as slicing jobs, would likely be a priority in any deal.

​Cheaper drugs are approved, but hard to find

The Food and Drug Administration is approving biosimilars — akin to generic versions of complex biologic drugs — and touting the potential savings in the process. But most of those drugs aren't actually available to consumers, Bloomberg reports — which means their potential savings aren't real, either.

The reason: "Basically, there's a gazillion patents," Avalere's Gillian Woollett told Bloomberg. As brand-name manufacturers figure out how to use complex patents to keep cheaper competitors off the market, the FDA's emphasis on approving those drugs won't have much effect on costs.

Correction: Due to a math error, the graphic at the top of yesterday's Vitals understated how much money some states would lose under Graham-Cassidy. An updated version is here. We apologize for the error.

What we're watching today: The Senate. Always the Senate.

Get in touch: I'd love to hear your feedback, questions, comments and, of course, tips: [email protected]