Nov 29, 2018

Axios Vitals

Good morning ... Did you know there was high drama going on in the world of chess? Well, there's been high drama going on in the world of chess.

1 big thing: Warning signs for mental health provider
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Data:; Chart: Axios Visuals

Over the past few years, Acadia Healthcare has saddled itself with huge amounts of debt, and top executive insiders have sold off stock in droves. All together, my colleague Bob Herman reports this morning, it adds up to a situation that doesn't inspire confidence in the future of the company.

Why it matters: Acadia is one of the largest operators of behavioral health facilities in the country, making it an important part of the nation's response to the opioid epidemic as well as broader mental health and drug addiction treatment.

Details: Acadia is sitting on $3.2 billion of long-term debt thanks in large part to buying a bunch of facilities in 2015 and 2016, according to the company's latest quarterly filing.

  • Acadia's "net debt to EBITDA," a ratio that shows how well a company can pay down debt with the money it's generating, is well above what most financial experts say is tolerable. And it's raised the eyebrows of skeptical Wall Street analysts.
  • Acadia is also hurt by the fact health insurance payments for mental health and addiction services are "bad" right now despite federal parity laws, said Emily Evans, a health care director at Hedgeye Risk Management.
  • Acadia CEO Joey Jacobs and Reeve Waud, the founder of his Chicago-based private equity firm that created Acadia, together owned more than 30% of the company in 2013. That's declined to less than 2% today.

Acadia did not respond to multiple requests for interviews. Waud did not respond to questions, but a spokesperson at an outside firm representing Waud's private equity group said Waud has followed federal rules that govern predetermined stock sales.

Go deeper.

2. Most insurance markets are highly concentrated
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Data: American Medical Association; Cartogram: Lazaro Gamio/Axios

Axios' Caitlin Owens flags a new study by the American Medical Association that found that 73% of metropolitan areas have highly concentrated health insurance markets.

  • One insurer had at least a 50% market share in almost half of the areas the study looked at.

Between the lines: Insurers with a lot of market power can, in theory, raise premiums and pay providers less. But this study isn't proof that insurers in concentrated areas are doing that.

  • It does, however, cite other research findings that insurer consolidation has correlated with higher premiums.
  • Provider consolidation is another huge market trend to watch, and one study has found that insurers with more market power can drive lower prices in highly concentrated provider markets.
3. The gene-editing debate gets real

Illustration: Aïda Amer/Axios

The scientific world is now talking more seriously about the implications of gene editing embryos than when it was just a prospect, Axios' Eileen Drage O'Reilly writes this morning.

What they’re saying: National Institutes of Health director Francis Collins made it clear on Twitter that he wants to slow it down. “Without ... limits, the world will face the serious risk of a deluge of similarly ill-considered and unethical projects,” he said.

  • Patrick David Hsu of the Salk Institute tells Axios: "This is bad, irresponsible science."

The other side: "Just because the first steps into a new technology are missteps doesn't mean we shouldn't step back, restart and think about a plausible" method of moving forward,” Harvard Medical School's George Daley said.

The bottom line: The alarm over what's could be next is real.

4. Health care is women’s top issue

Female voters helped propel a record number of women into Congress earlier this month, and a new SurveyMonkey/S&P Global survey finds that health care is by far the No. 1 issue female voters want policymakers to address.

By the numbers: 30% of women say health care is the issue most important to them, while jobs and the economy are a not-especially-close second, at 19%.

  • By contrast, 26% of men put jobs and the economy first, followed by 21% who say it’s health care.
  • Overall — not limited to health care — a plurality of women (39%) say they trust Democrats the most on financial policy, and 60% say they want government to “do more to solve problems.” Men are more inclined to trust Republicans and say government does too much.
5. Troubled pharmacy aided executions

A death chamber in Huntsville, Texas. Photo: Joe Raedle/Newsmakers via Getty Images

Greenpark Compounding Pharmacy in Houston has been cited for a lot of safety problems over the past few years, BuzzFeed News reports. It's also been providing the drugs Texas uses to administer the death penalty — and Texas performs more executions than any other state.

How it works: Big drug companies have increasingly become uncomfortable providing drugs for executions — it does conflict with their "we save lives" brand. So states have turned instead to pharmacies that are able and willing to modify the drugs they sell, through a process known as compounding.

  • Greenpark, in Texas, has been cited for a 48 safety lapses in the past 8 years, and had its license suspended in 2016 after compounding the wrong drug and sending a child to the emergency room, BuzzFeed reports.

Improperly compounded drugs can either fail to work as intended or have unintended side effects — which could explain why multiple Texas inmates screamed/said they felt like their throats were burning as they were being put to death.