Jun 20, 2019

Axios Vitals

By Caitlin Owens
Caitlin Owens

Situational awareness: An e-cigarette literally exploded in a teenager's mouth, causing damage to his jaw, NYT reports.

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Today's word count is 1,046 words, or ~4 minutes.

1 big thing: 2020 may be a turning point on health care costs

Illustration: Rebecca Zisser/Axios

Employers will likely step up their efforts to rein in health care costs next year, a new PwC Health Research Institute report predicts, partially because they've nearly maxed out their ability to offload costs onto employees.

What they're saying: "2020 likely will be, in some ways, a turning point in the long arc of employer-sponsored insurance, a year in which more employers fight back," the report's authors write.

The big picture: Employers' medical costs are expected to rise by 6% next year, thanks to drug costs, chronic diseases and greater access to mental health care.

  • Employers have handled rising health care costs over the last decade primarily by increasing employees' cost-sharing, but that strategy may have run its course.
  • At least one-third of employees in the HRI survey said they didn't have enough money saved to pay their deductible.
  • Employers “are at a very interesting kind of crossroads ... and now it's time to get active and start working on price," said Ben Isgur, HRI's leader.

Between the lines: Nothing keeps business' health care costs in check better than healthy workers — and employers are getting increasingly hands-on in that pursuit.

  • They're getting more active in the delivery of primary care, including worksite health clinics. Some are also negotiating contract prices and setting up their own provider networks.
  • Employers can also nudge employees toward lower-cost providers and more efficient forms of care — for example, trying physical therapy before surgery.

The bottom line: Employers are the health care system's sleeping giant. Prices will go down when employers decide to use their massive political and financial leverage.

Go deeper:

2. The flimsy promises of brain wearables

Illustration: Rebecca Zisser/Axios

In an increasingly lucrative market, dozens of companies and startups are selling futuristic-looking headgear that promise to connect to your brain to relieve stress, enhance memory, improve sleep or increase focus.

What they're saying: Experts say these products make mostly unsubstantiated claims, and in some cases can harm buyers, my colleague Kaveh Waddell reports.

There are two broad categories of wearable brain devices — those that record the user’s brain activity and others that stimulate the brain with electrical currents.

  • These technologies are mainstays in research labs and hospitals — but now they're on Amazon and Kickstarter, too.

For example, Bellabee, a $159 headband and app, says it can help reduce symptoms of ADHD and PTSD.

  • Modius, a $499 headset, claims to curb appetite and help users lose weight.
  • The Brain Stimulator, a $120 device with electrodes that send a current to the brain, says it's based on technology that can help with depression, pain, addiction and memory.

None of the three — a small subset of the growing market — offers research showing that their devices do what they claim. None responded to requests for comment.

  • The government has done little to police companies selling these devices straight to consumers.

Go deeper.

3. United forced to sell part of DaVita acquisition

The Federal Trade Commission yesterday approved the $4.34 billion sale of DaVita's physician unit to Optum — a growing division of UnitedHealth Group.

  • But Optum will have to divest DaVita's large physician operations in Nevada to clear antitrust concerns, Axios' Bob Herman reports.

The big picture: The deal, which has been under FTC review for 19 months, allows UnitedHealth to continue its conquest of all aspects of the health care system — in this case, as a health insurer and care provider.

Details: The agreement stipulates that Optum will have to sell DaVita's primary care group in the Las Vegas area to Intermountain Healthcare, a hospital system based in Utah. Those terms were not disclosed.

  • Optum already owns the other large physician group in the Las Vegas area, so if it acquired DaVita's operations, it would control 80% of the physician market, which "would allow UnitedHealth Group to exercise market power" and raise prices at will to other insurers, the FTC said in its complaint.
  • Because UnitedHealth is also the largest Medicare Advantage insurer in the area, controlling the 2 largest physician groups would allow it to charge rival plans more or exclude its doctors from competitors' networks.

That's not all: Colorado's attorney general negotiated a separate settlement to address anticompetitive concerns.

The bottom line: DaVita will now focus on its core dialysis business, while UnitedHealth maintains its position as one of the largest employers of doctors and biggest insurer for seniors.

4. Senate leaders release surprise billing proposal

Remember when I told you on Monday that ambulances aren't addressed in any of Congress' surprise billing proposals? Well, now they are.

  • Sens. Lamar Alexander and Patty Murray released a bill yesterday that, among many other things, folds air ambulances into its prohibition on surprise billing.
  • Ground ambulances aren't addressed, but states have more power to regulate those.

Patients' cost-sharing would be based on the in-network rate for their air ambulance ride, and the ambulance couldn't bill them beyond that.

  • Insurers would pay out-of-network air ambulances the median rate that the insurer has negotiated with other air ambulances in their area.

Related: The senators had previously listed 3 options for addressing payment disputes over surprise medical bills more broadly, but yesterday's bill settled on establishing a benchmark payment rate.

  • Like with air ambulances, insurers would pay providers the median commercial rate for the service in that area.
  • The Federation of American Hospitals quickly announced that it opposes the bill. Like most other provider groups, it had supported an arbitration method.

By the numbers: In 2017, about 1 in 6 emergency room and inpatient hospital visits resulted in at least one out-of-network charge, according to a new Kaiser Family Foundation analysis.

5. For the first time, a Sackler speaks

Members of the Sackler family, who own Purdue Pharma, have notoriously avoided the media. But David Sackler broke the silence by speaking with Bethany McLean of Vanity Fair to say his family "didn't cause the [opioid] crisis," Bob writes.

What he said: Sackler conceded that marketing claims saying OxyContin had small risks of abuse and addiction were wrong, but argued they were based on the science at the time.

  • He also said people should "look at all the good Purdue has done … it's overwhelming what the company over the years was trying to do to fix this problem."

Yes, but: Reporting in the Los Angeles TimesProPublica and elsewhere shows the company, led by the Sacklers, knew about the problems with OxyContin and other prescription opioids for years and still encouraged aggressive prescribing to boost sales.

  • One of the most damning examples come from company emails that show David's father, Richard, agreeing with a plan not to tell doctors that OxyContin is a stronger painkiller than morphine.

Worthy of your time.

Caitlin Owens