May 4, 2017

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning ... Congratulations, House! Two months later, you may finally get this health care bill off your doorstep. Congratulations, Senate! It's about to become your problem. Unless it fails, of course. No ending is too ridiculous for this story.

The big thing: What the House is voting for

It looks like the House Republican health care bill may be coming back to life after all. And if the leadership is this close to having 216 votes, they may well get the rest when the roll call starts. But don't get the impression this means the Affordable Care Act repeal effort is alive and well. This is Republicans just scraping by, getting a deeply unpopular bill off of their plates as quickly as they possibly can.

Here's what to keep in mind for today's vote:

  • The bill is now a patchwork of classic Republican health care ideas mixed in with just enough concessions to conservatives and moderates to attract the bare minimum votes that they need.
  • The final change, the one that won the votes of Rep. Fred Upton and a few others, was an $8 billion fund created by an amendment that no one outside of a handful of Republicans even saw before last night.
  • The House will vote on this version of the Affordable Care Act replacement without a Congressional Budget Office estimate, and therefore no idea what it costs, how many people it might help, or how many it might hurt.
  • What Republicans will gain from this vote: They'll be able to say they didn't give up on their campaign promises to get rid of Barack Obama's health care law.
  • They'll also be able to put some of their ideas into practice, like lowering insurance prices through competition and flexibility.
  • In an op-ed for CNBC last night, Health and Human Services secretary Tom Price noted that it will also give states waivers from some of the ACA's insurance rules, "based on the insight — gleaned from experience, not partisan ideology — that the people closest to a problem are best equipped to fix it."
  • But any Republican who votes for this bill is also taking a lot of risks. They're voting for waivers from the ACA's ban on charging higher premiums to sick people, as well as waivers from the minimum benefits it requires insurers to cover.
  • They're also voting for $880 billion in Medicaid cuts over 10 years.
  • And — based on the original CBO estimate — they're voting for a bill that could cover 24 million fewer people.

The debate in two quotes:

  • "The president has worked to make sure that in every single scenario, anybody — everybody — he has kept true to his word that pre-existing conditions are covered." — White House press secretary Sean Spicer
  • "Hey GOP, don't ever lecture us again on fiscal responsibility. You're about to reorder 1/6 of the US economy w no idea what it costs." — Tweet from Democratic Sen. Chris Murphy
The Upton amendment: a shield or a band-aid?

There were a lot of analyses that suggested $8 billion over five years was pocket change compared to the potential costs to sick people if Affordable Care Act rules are waived, as I reported yesterday. And the critics were trying to outdo each other with the metaphors — like Senate Minority Leader Chuck Schumer, who said the Upton amendment was "like administering cough medicine to someone with stage 4 cancer."

But Upton and House Energy and Commerce Committee chairman Greg Walden both said it should be enough, Caitlin Owens reports. Why? Because of the same point we made earlier this week: Republicans just don't think that many states will apply for the waivers. Walden said the money would only be needed in "extremely limited" situations.

"I would guess that most governors, maybe all, I don't know, will not seek a waiver, and in that case my amendment just covers something if maybe it happens," Upton said at the House Rules Committee meeting last night. If the money isn't enough, Upton said he'll fight for more.

That's what you call hedging your bets

Since there's not going to be a Congressional Budget Office estimate any time soon for the changes to the health care bill, the Committee for a Responsible Federal Budget took a crack at it (not counting the Upton amendment). They found that the revisions could:

  • Save as much as $5 billion, or:
  • Cost as much as $265 billion.

Why? Because the group said it's "impossible to predict" how many states would apply for the waivers that would let them reduce the minimum benefits and charge higher premiums for sick people (if they have high-risk pools as a backup).

The fine print: The reason costs might vary so widely is that the more people gain insurance, the more people would get tax credits to help pay for it — so the federal government would have to spend more on those tax credits. The group acknowledges that more people might buy health insurance if the benefits are cut, but it adds that it could be insurance "that CBO does not view as sufficient to be considered 'coverage.'"

Why the hospital industry has been a big flea market lately

Bob Herman has a story this morning about the frenzy of hospital purchases and sales over the last week, mostly by three large for-profit companies: HCA, Tenet Healthcare and Community Health Systems. His conclusion: All of the buying and selling is happening because buyers want to bulk up their market power, while sellers want to reduce huge loads of debt or focus their attention elsewhere.

Why it matters: It affects the pricing power in local markets. Whenever any hospital chain acquires more hospitals, it often can squeeze commercial health insurers for higher payments.

Aetna pulls out of another state, but CEO predicts no repeal

The insurer announced yesterday that it won't sell Affordable Care Act coverage in Virginia next year. But its CEO, Mark Bertolini, didn't sound like he was giving up on the law completely, per Forbes. Speaking at the Fortune Brainstorm Health conference yesterday, he predicted the ACA wouldn't actually get repealed because of the lack of 60 votes in the Senate. His conclusion: "What we need to do is admit it needs to be fixed. Not repealed."

Still, look how much Aetna's tone has changed over the last year and a half:

Aetna in October 2015: "We think it's way too early to call it quits on the ACA," Bertolini said at the time. "We view it still as a big opportunity for the company."

Aetna in May 2017: After retreating from most exchanges, Aetna leaves Virginia's individual market and remains in only two states: Delaware and Nebraska.

Here's what we're spending on prescription drugs

Spending on hepatitis C drugs has fallen drastically since Gilead rolled out its blockbuster products in 2014. But Bob Herman reports that America is still spending enormous sums of money on prescription medicines — especially brand-name drugs — according to the highly anticipated annual report from QuintilesIMS, a health technology company that tracks pharmaceutical spending. Net spending on drugs reached $323 billion last year. The big numbers to know:

Total drug spending (based on the higher list prices) increased 5.8% from 2015 to 2016, totaling $450 billion.Net drug spending (based on rebates and discounts from drug companies) increased at a slower 4.8% rate, totaling the $323 billion figure.Why list prices matter: Patient deductibles and coinsurance rates are based on those manufacturer-set prices.The line that defines patient anger over drug prices: "Many patients are abandoning prescriptions at the pharmacy due to 'sticker shock', and abandonment rates for brands are 2.5 times higher when a patient faces a deductible and sees the full cost of the medicine compared to patients who had a set copayment."

Caitlin Owens

What we're watching today: What do you think?

What we're watching next week: FBI director James Comey gives keynote address on health care cyberthreats at the American Hospital Association annual membership meeting, Monday, May 8; Senate Finance Committee hearing on reauthorization of the Children's Health Insurance Program, Tuesday, May 9; Senate HELP Committee marks up FDA user fees reauthorization bill, Wednesday, May 10.

Thanks for reading, and let me know what's the biggest thing you'll be watching if this bill passes: david@axios.com.