Sep 17, 2019

Axios Vitals

Good morning. Today's word count is 864, or ~3 minutes.

1 big thing: Purdue Pharma's bankruptcy test

Protestors outside of Purdue's headquarters. Photo: Erik McGregor/LightRocket via Getty Images

Purdue Pharma's first bankruptcy hearing starts today, commencing a process that will attempt to resolve 2,600 lawsuits that accuse the OxyContin maker of instigating an opioid crisis that has killed tens of thousands of Americans, Axios' Bob Herman writes.

The big picture: Purdue is using bankruptcy as a tool to expedite legal remedies, but many state and local governments are ready to sue the Sackler family owners beyond bankruptcy court, arguing the family doesn't deserve bankruptcy protection.

Driving the news: To speed up the legal proceedings, several plaintiffs in the national opioid lawsuit have supported a settlement that would turn Purdue into a public benefit trust corporation, remove the Sacklers as owners, and allow governments to collect all future OxyContin profits.

  • Purdue declaring bankruptcy, and thus removing itself as a defendant, is part of the deal. Purdue and the Sacklers have admitted no wrongdoing.

Yes, but: Many states are preparing separate lawsuits against the Sacklers, arguing that the settlement is insufficient to help those struggling with addiction and that Purdue's bankruptcy is a maneuver to protect the Sacklers' wealth.

Where it stands: North Carolina Attorney General Josh Stein told Axios he is filing a lawsuit against the Sacklers in state court "imminently." More will follow.

Between the lines: A major sticking point is what the Sacklers specifically will pay.

  • The Sacklers would pay $3 billion toward the tentative settlement, and possibly another $1.5 billion if a separate Purdue subsidiary is sold at a certain price. But Stein said all, not some, of the restitution from the Sacklers should be guaranteed.
  • The Sacklers have siphoned billions more dollars from Purdue into a complex web of offshore tax havens and trusts, the AP recently reported.

Go deeper: Purdue's bankruptcy filing

2. Air ambulances create memberships for patients

Air ambulance companies are selling memberships as assurance that if a patient needs their services, they won't get slammed with massive bills. But these subscription services have drawn national skepticism, Kaiser Health News reports.

Between the lines: Air ambulances often aren't covered by private insurance, and they're becoming more expensive at the same time that they're becoming more necessary in rural areas without access to emergency care.

  • They're one solution to rural hospital closures that leave patients stranded, and they portray themselves as a safety net for the people who live in these communities.

Yes, but: Some state regulators say the membership services aren't as helpful as they're advertised to be, and one of the nation's largest air ambulance providers has decided against offering them.

  • The air ambulance that responds to an emergency call may not be the one that that patient has a membership with.
  • Patients who sign up for memberships would still get billed and then have to work through their insurance to handle it, often a frustrating and time-consuming process.
  • Air ambulance companies aren't officially insurance, so they can end the membership at any time without notifying the patient — which could be an unpleasant surprise following an emergency.

Go deeper: How air ambulances got so expensive

3. Health care friction in the UAW strike

Members of the United Auto Workers Union picket outside the General Motors Assembly Plant on Sept. 16 in Wentzville, Mo. Photo: Michael B. Thomas/Getty Images

One of the biggest points of contention between General Motors and the United Auto Workers is health coverage, Axios' Bob Herman reports.

By the numbers: Workers pay roughly 29% of their premiums for family health insurance on average, and 18% for single coverage, according to the Kaiser Family Foundation.

  • GM wanted UAW members to absorb 15% of their premiums, up from the 3% they currently pay, according to Automotive News. GM then backtracked and agreed to keep things at their current levels.

The bottom line: UAW health benefits are a lot more generous than the average workers', both in terms of premium contributions and out-of-pocket costs like copays and deductibles. Workers don't want those benefits to erode.

  • But the rising cost of health care means keeping those insurance plans comes at the expense of wages.

Flashback: Health care cuts drove some of the teachers' strikes last year.

4. The rise of "3-parent" babies

A procedure designed to stop the transmission of genetic disease is being used by women struggling with infertility, despite the concerns of some scientists and researchers, OneZero reports.

  • The procedure, known as "3-person IVF," combines the DNA of the mother, the father and an egg donor.

At least 10 infertile women have given birth to babies conceived using 3-person IVF, but only 1 baby has been born as a result of the therapy being used as it was intended to — to avoid the transmission of genetic disease.

Even though the European Society of Human Reproduction and Embryology (ESHRE) has urged "extreme caution" on the use of the technique, some clinics will continue to perform the procedure.

  • "The current lack of solid scientific evidence providing safety reassurance requires more study and continued vigilance," the ESHRE said in a statement. "At the present stage, and until this technology has been proven to be effective and safe, ESHRE strongly discourages the use of mitochondrial donation to alleviate an infertility condition."
5. 1 money thing

Doctor Patient Unity has spent $28 million so far on their surprise billing ad blitz, but all they have to show for it is ... a congressional investigation.

Driving the news: The House Energy and Commerce Committee announced yesterday that it's launching a bipartisan investigation into private equity's role in surprise billing.

  • The 2 physician staffing groups behind Doctor Patient Unity, TeamHealth and Envision Healthcare, are backed by private equity. Research has shown that these groups frequently send patients surprise medical bills while enjoying high in-network rates.
  • "We are concerned about the increasing role that private equity firms appear to be playing in physician staffing in our nation’s hospitals, and the potential impact these firms are having on our rising health care costs," E&C Chairman Frank Pallone and Ranking Member Greg Walden wrote.