Nov 4, 2019

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning. Today's word count is 672, or ~2 minutes.

1 big thing: Elizabeth Warren's dream health care world

Illustration: Aïda Amer/Axios

Sen. Elizabeth Warren's Medicare for All plan takes on every major health care industry — insurers, doctors, hospitals and drug companies — in her pursuit of expanding coverage and lowering costs for the middle class.

Why it matters: We've never tried any cost containment measures that are remotely close to being as aggressive as Warren's, and there could be consequences if payment rates are slashed so low.

Private insurance would be eliminated. Warren argues that would save hundreds of billions of dollars in administrative spending, and relieve patients of the hassle of dealing with their insurer.

  • Americans would no longer have to worry about reaching their deductibles or whether their doctors are in their insurance network.
  • They'd pay no premiums and have "virtually no" out-of-pocket costs, according to Warren. They'd have expansive health benefits.

To pay for all of this, providers would see drastic payment reductions.

  • Doctors would generally be paid at current Medicare rates — which on average are much lower than private insurance rates.
  • Hospitals would be paid an average of 110% of Medicare rates, with adjustments for rural and teaching hospitals.
  • Some experts warn this could lead to longer waits for care.

Drug prices would plummet.

  • The federal government would be allowed to negotiate drug prices, and Americans would pay no more for a drug than 110% of its average international price.
  • If negotiations don't work, Warren would override a drug's patent or have the government manufacture the drug.
  • Experts have warned that even less aggressive drug pricing plans would come at the cost of less innovation by drug companies.

The bottom line: The days of American health care as big business would likely be over. Patients may win financially, but there's no way of knowing at what cost to the quality of their care.

2. Hospitals dodge transparency bullet

Illustration: Aïda Amer/Axios

The Trump administration is promising to issue a "forthcoming final rule" related to its proposal requiring hospitals to post all of their privately negotiated prices with insurance companies.

  • It delayed a decision in a final regulation released Friday, Axios' Bob Herman reports.

Between the lines: Even if the Trump administration follows through and issues a price transparency rule, the industry almost certainly will sue to block it — meaning this policy is years away from seeing the light of day.

  • Hospitals and insurers flooded the government with comments, arguing they should not have to publish their negotiated rates because it'd be too complex
  • These contracts reflect the wild variation of prices and the market power of a given entity, and they will be guarded at all costs.

That's not all: The final regulation took a few other shots at hospitals, but those policies are on similarly tenuous legal ground.

  • The Centers for Medicare & Medicaid Services still plans to slash payments next year for doctor visits performed at hospital-owned outpatient offices, even though a federal judge ruled the policy unlawful.
  • CMS also said it still will make major cuts to hospital payments for drugs, issued through the 340B program, even though those reductions are also being ruled unlawful.

The bottom line: The health care industry is winning, almost every major policy battle in the Trump administration.

3. High deductibles hurt diabetes patients

Switching to a high-deductible health plan has an impact on diabetes patients' adherence to their medication — but only if they're taking brand-name anti-diabetic drugs, a new study in JAMA Network Open found.

Why it matters: This is further evidence that putting people on the hook for too much of their health care costs can have adverse health effects if they then can't afford their care.

Details: The study observed type 2 diabetes patients, half of whom switched to a high-deductible plan. It differentiated between those taking branded and generic anti-diabetic drugs.

  • "This study suggests that enrollment in [a high-deductible health plan] may disrupt delivery of care for patients with type 2 diabetes, especially those for whom branded options offer optimal disease management," the authors conclude.

Go deeper: Employers are relying less on high-deductible health insurance plans

4. Trump to nominate a new FDA commissioner

President Trump announced Friday that he plans to nominate Stephen Hahn, the chief medical executive at MD Anderson Cancer Center, to lead the FDA, Stat reports.

Between the lines: Hahn is a Washington outsider and has never worked in government, making it tough to predict what his agenda would look like.

5. While you were weekending...
  • A federal judge on Saturday temporarily blocked a Trump administration
    proclamation requiring immigrant-visa applicants to prove they can obtain health insurance within 30 days of entering the U.S. or cover their own health care costs, Axios reports.
  • Centrist Democrats fear that Sen. Elizabeth Warren's Medicare for All plan will cause problems for down-ballot candidates, Politico reports.
  • Rural seasonal workers in Montana are worried about the state's new Medicaid work requirements, NPR writes.
Caitlin Owens