Axios Vitals

A briefcase with a red cross on the front.
January 13, 2020

Good morning. This newsletter is now 3 years old. Thanks to all of you who have stuck with us through the craziness, and also to those of you who have just recently jumped on board.

Today's word count is 544 words, or a 2-minute read.

1 big thing: Hospitals' dueling financial realities

Illustration of a large golden caduceus beside a tiny stone caduceus
Illustration: Sarah Grillo/Axios

As hospital prices rise and much of the sector continues to rake in cash, rural hospitals continue to shutter.

Why it matters: There's no way to address U.S. health care spending without cutting hospital costs.

  • But blanket cuts could hurt hospitals that are already struggling to keep their doors open, leaving vulnerable patients without access to care.

Driving the news: At least 30 hospitals entered bankruptcy in 2019, Bloomberg reported last week.

  • Rural hospitals' hardships have been well-documented: They serve a shrinking population that has high health needs and is disproportionately uninsured or covered by government insurance.
  • The shutdown of an urban hospital in Philadelphia is evidence that it's not just rural areas that are facing hospital closures.

Yes, but: Some hospital systems are reaping in hefty profits.

  • In an analysis of 48 not-for-profit hospital systems, my colleague Bob Herman last year found that their net profit margin was 8.6%.
  • Bob has also reported that "not-for-profit hospital systems increasingly operate more like corporate titans on the stock exchanges than the charities they promote themselves to be."
  • Private insurers pay hospitals, on average, 241% of what Medicare pays for the same services, and hospitals are by far the largest contributor to U.S. health spending.

Go deeper: How "Medicare for All" would affect hospitals

2. Google's vast reach into our health data

Through its partnerships with health care providers, Google can view tens of millions of patient records in at least three-quarters of states, the Wall Street Journal reports.

Why it matters: Some of these partnerships allow Google to access identifiable information about patients without their or their doctors' knowledge, raising fears about how this data may be used.

Details: Google is developing a new search tool — designed to be used by doctors, nurses and potentially patients — that stores and analyzes patient information on its servers.

  • The company and some health systems say argue that data-sharing can improve patient outcomes.
  • Google says its health endeavors aren't connected with its advertising business.

Intermountain Healthcare has a deal that gives Google access to patients' records, similar to Google's deal with Ascension.

  • Google announced a partnership with the Mayo Clinic in September, and although Mayo officials said then that patient data would remain private and unidentifiable, the contract permits Mayo to share personally identifiable health data in the future.

3. A new market solution to high drug prices

A venture capitalist is launching a company today to create new drugs that mimic the effects of blockbuster drugs, and then sell them to insurers and hospital systems at a lower price, STAT reports.

Between the lines: The key question is whether insurers and hospitals will buy these new drugs over their competitors.

  • Just because a drug is cheaper doesn't mean that it'll get prescribed more often. That's partly because patients and doctors don't really like to switch to a new, cheaper medication.

By the numbers: CEO and chairman Alexis Borisy said that the company, EQRx, has raised $200 million. He hopes it'll start developing around 50 different drugs over the next decade.

  • Borisy's experience with starting drug and biotech companies is supporters' main reason for thinking this might work.

4. Flu season rears its ugly head

A promotion sign for flu shots.
Photo: Jeffrey Greenberg/Education Images/Universal Images Group via Getty Images

A surprising influenza strain, known as influenza B, is responsible for 21 of the 32 pediatric deaths in this flu season, according to new data from the Centers for Disease Control and Prevention.

Between the lines: Influenza B hasn't been a main cause for sickness in the U.S. for 27 years, and isn't a risk to senior citizens, Axios' Marisa Fernandez reports.

  • This year's vaccine does little to guard against it.

5. While you were weekending

  • NYT profiles the youngest patient to receive a new gene therapy that scientists hope will cure her sickle cell disease.
  • Endo Pharmaceuticals has agreed to an $8.8 million settlement with Oklahoma over the state's claims about the company's role in the opioid crisis, WSJ reports.
  • The Trump administration has asked the Supreme Court not to review a major lawsuit threatening the Affordable Care Act before the 2020 election, as Democrats have asked the court to do, Politico reports.