Mar 30, 2018

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning ... Situational awareness: HHS secretary Alex Azar formalized two important advisers yesterday. Former CVS executive Daniel Best will spearhead efforts on drug pricing, while Brett Giroir, already an assistant secretary, will coordinate HHS' response to the opioid epidemic.

Health care turmoil is hurting the gig economy

The future of work is moving further away from employers — in the “gig economy,” almost everyone is a self-employed independent contractor.

The problem: If you’re no one’s employee, you’re not eligible for employer-based health benefits. Yet Washington continues to neglect the individual insurance market, even as more and more people enter it.

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Reproduced from a Brookings Institution analysis of BLS data; Chart: Axios Visuals

The big picture: As my colleague Caitlin Owens reports this morning, the data clearly shows a shift toward self-employment. But that hasn’t translated into much serious concern for the market where those people will get their health insurance.

  • "Obamacare and the gig economy were a match made in heaven," the Kaiser Family Foundation's Larry Levitt told Caitlin. "But…it’s not as good a solution for gig workers as it was initially."

The catch: This is one area where the Trump administration’s health care changes might do some good — particularly the expansion of association health plans, which allow similarly situated individuals to band together and buy what is basically an employer plan.

  • Think, for example, about a bunch of Uber and Lyft drivers in the Washington area. They’re not employees of Uber or Lyft; they don’t make a ton of money; a lot of them are young and might not want or need comprehensive coverage; and they’re physically in the same place, so they’d be able to use the same network of doctors.

Go deeper: Read Caitlin’s story on

Walmart may buy Humana

Walmart is in early discussions about buying health insurer Humana, the Wall Street Journal reports.

Between the lines: A combined Walmart and Humana would control pharmacies, health insurance and a pharmacy benefit manager. Sound familiar? It’s almost identical to the CVS-Aetna deal.

  • Except Walmart and Humana would be geared heavily toward seniors and those living on more fixed incomes — the very same Medicare and Medicaid populations that have been growing like gangbusters as more baby boomers age and more states expand Medicaid to the poor.

The big question: One of the concerns surrounding the CVS-Aetna deal is whether it would consolidate too much market power and stack the deck against potential competitors. Expect to hear very similar questions about this deal, if it proceeds.

  • This would also provide some protection against Amazon's possible move into the pharmacy business — the kind of safety that pretty much the whole health care industry wants.
Privacy rules and opioid treatment collide

Almost everyone agrees that doctors and hospitals should be able to more easily share electronic copies of patients’ health records.

But federal law prohibits them from sharing records about substance-abuse treatment without written consent — and that’s creating some hurdles amid the biggest addiction crisis the country has ever seen.

Driving the debate: There’s a push in Congress to relax those restrictions, Bloomberg BNA explains, though lawmakers don’t quite agree about how far to go.

  • Because these records can’t be shared, they’re often kept physically separate from other health records. Hospitals say that if access to substance-abuse records is only loosened a little bit, providers will still have to segregate those records and they won’t end up being any easier to share.

Yes, but: Some addiction-treatment providers worry that opening up these records too widely would discourage people from getting help, due to fears about the security of such sensitive health records.

More bad news for an ACA cost-control effort

A new analysis from Avalere, a consulting firm, sheds more light on the disappointing performance of accountable care organizations — a new model created by the Affordable Care Act with the goal of lowering overall costs through better care coordination.

  • When the law passed in 2010, the Congressional Budget Office thought ACOs would end up saving Medicare roughly $2 billion by 2016.
  • Instead, they ended up costing the federal government about $300 million over that period, according to Avalere.

Yes, but: There are still a few glimmers of hope in these findings.

  • There are two models for ACOs. One lets them share a piece of any savings they generate for Medicare. The other gives them a bigger slice of those savings in exchange for also accepting a financial risk if they don’t meet their savings targets.
  • The second model is working better than the first, Avalere said — the issue is just that more providers signed up for the no-risk option.
  • ACOs also have generated more savings after they get about three years of experience under their belt.
Caitlin Owens

For our Ohio readers: Join Axios' Mike Allen at The Ohio State University Monday for a discussion on the Future of Work with entrepreneur Mark Cuban, Governor John Kasich, and our own Jim VandeHeiTo RSVP click here.  

Have a great weekend! Let me know what's on your radar for next week: