Dec 4, 2019

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning. If you are interested in learning more bizarre details about last year's Chinese CRISPR babies saga, the MIT Technology Review has exclusive excerpts from an unpublished manuscript describing the project.

Today's word count is 716, or ~3 minutes.

1 big thing: The urban-rural health divide is costing lives

Illustration: Sarah Grillo/Axios

The health disparities between urban and rural areas aren't getting any better, new studies published in Health Affairs confirm.

The big picture: Rural areas fell short of every benchmark for improvement in seven major causes of death, according to one study — and others suggest that the situation may never get better for the 62 million Americans who live in rural parts of the country, Axios' Marisa Fernandez reports.

What they're saying: "Communities with large populations that can yield revenue have flourishing health care institutions, while those with fewer residents have lost ground," authors Janice Probst, Jan Marie Eberth and Elizabeth Crouch wrote.

By the numbers: In 2017, chronic obstructive pulmonary disease, death and suicide rates were 45% higher in rural than in urban areas.

  • Deaths related to COPD, diabetes and suicide had all gotten worse in rural areas.
  • Overall, mortality rates for coronary heart disease, stroke and cancer were improving, but not as the Department of Health and Human Services wanted.

Go deeper:

2. Private equity eyes a rural hospital chain

Private equity giant KKR has floated a private buyout of Quorum Health, a 24-hospital system that operates in rural and small suburban communities, for about $30 million, or $1 per share, Axios' Bob Herman reports.

  • Quorum executives said they would "carefully consider" any deal.

Where it stands: Private equity has increasingly bought up hospital chains, doctors' groups, and ground and air ambulance companies due in large part to those firms' inherent market power. KKR, for example, just took physician staffing firm Envision Healthcare private for $10 billion last year.

Private equity has shown particular interest in publicly traded hospital systems — most recently with major deals for LifePoint Health and Iasis Healthcare.

By the numbers: Quorum, a group of hospitals that Community Health Systems spun out in 2016, has lost $446 million since 2017.

  • The company has struggled with high interest expenses from its debt, as well as a drop in hospitalizations and surgeries.

Yes, but: Quorum still generates $1.6 billion in revenue every year by owning hospitals that have monopoly or near-monopoly power in their markets.

  • That concept is attractive to any investment group willing to take on risk. But that raises questions about costs and quality for patients, and what the future holds if private equity decides to abandon a hospital.
  • Quorum executives also hinted during its latest earnings call that its hospitals will be more aggressive in collecting payments from health insurers and patients starting next year.
3. A strange pairing on drug prices

A group opposing drug pricing measures around the country includes major pharmaceutical companies as well as large construction-industry unions, the New York Times reports — strange bedfellows, to say the least.

Why it matters: Ads run by the Pharmaceutical Industry Labor-Management Association may confuse public perception of the nature of opposition to drug pricing measures.

  • For example, the group ran Facebook ads against House Speaker Nancy Pelosi's drug pricing bill, although the bill is supported by many major labor groups.

Between the lines: Unions have an interest in lowering prescription drug prices, both as a way to relieve the stress of high out-of-pocket drug spending and of lowering total health costs.

  • The group's executive director said that its focus is on union construction jobs. Its positions are similar to those of the drug industry.
4. Biologics provision may be dropped from USMCA

Mexico is considering a U.S. proposal to leave biologics protections out of the new trade deal between the two countries and Canada, Bloomberg reports.

Why it matters: The change could help the trade agreement get across the finish line by garnering Democratic support, but it'd be a big loss for the pharmaceutical industry.

Details: The original trade pact, which was a renegotiation of NAFTA, would have given biologics 10 years of market exclusivity in each of the three countries — an extension of their monopoly period under current Mexican and Canadian law.

  • Including pharmaceutical industry protections in trade deals has been a Republican priority for years.
5. A 2020 fight over the public option?

South Bend, Indiana, Mayor Pete Buttigieg and former Vice President Joe Biden. Photo: Win McNamee/Getty Images

Former Vice President Joe Biden is accusing South Bend, Indiana, Mayor Pete Buttigieg of taking his public option idea, AP reports.

What he's saying: "I was the first guy to come out with the plan to build on Obamacare, and I'm glad Pete has a version of that same plan," Biden said yesterday.

  • On Monday, he said that Buttigieg essentially "stole" his idea.

Reality check: The public option did not originate with Biden, and plenty of other Democrats — including those running for president — have their own spin on the policy idea.

  • As you Vitals readers probably already know, there was even a push to include one in the Affordable Care Act.
  • That said, Buttigieg did say he supports Medicare for All in 2018 — back when the definition of Medicare for All was a free-for-all.

My thought bubble: It's about time we have a debate over the merits of different public option proposals, but this is sadly not that debate.

Go deeper: Democrats and the "public option" options

Caitlin Owens