May 1, 2017

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning ... So yeah, sure, this could be the week for the health care vote. Why not? My colleague Jonathan Swan reported yesterday that the White House is actually pretty hopeful but trying not to jinx it. We're not hearing any change in tone from the Hill — still "sure, maybe, who knows." But it would be a mistake to rule out a last-minute vote — they really can't let this go until they pass something.

Meantime, we have an actual budget deal! So stay tuned, and please keep checking the Axios health care stream for all the latest.

Breaking overnight: NIH is a big winner in budget deal

President Donald Trump's team wanted Congress to start cutting the National Institutes of Health budget in the government funding bill. Instead, in the budget deal reached last night, Republican and Democratic negotiators did what they had already planned to do: They increased the NIH budget by $2 billion, for the second year in a row. That's after 12 years of stagnant funding for the agency.

What it means: Top Republican appropriators, including Sen. Roy Blunt and Rep. Tom Cole, basically ignored Office of Management and Budget director Mick Mulvaney, who wanted to cut NIH by $1.2 billion as a down payment on bigger reductions next year.

What to watch next: Congress is going to have to fight the same battles all over again next year, when the Trump administration wants to cut the NIH budget by 19 percent.

Other highlights:

  • $650 million increase for fighting opioid abuse
  • $400 million increase for Alzheimer's research
  • $120 million increase for the Precision Medicine Initiative
  • $110 million increase for the BRAIN Initiative (mapping the brain)

What's not in the deal: Cost-sharing reduction payments to insurers under the Affordable Care Act. They'll have to rely on Trump administration assurances that it will keep making the payments "for now."

Why those state health care waivers might be a mirage

Whether you're a supporter or a critic of the state waivers in the new amendment to the GOP health care bill, keep one thing in mind: There might not be a lot of states that even apply for them. So there might not actually be a huge impact, except in a handful of states, on the rules that could be waived under Rep. Tom MacArthur's amendment — minimum benefits, price variations based on age, and the ban on insurers charging more to sick people.

The catch: Governors would have to take responsibility for the potentially unpopular changes, and a lot of them won't want to. That's no secret on the Hill, as Caitlin Owens has found in talking to Republican staffers.

  • "No one believes that it will get executed by many states except Texas, Kentucky, Tennessee and maybe a few others," one Senate GOP aide said.
  • A top House GOP aide said moderates really don't need to worry about it: "There's a lot of moderates from blue states that, the idea that their governor is ever going to drastically change something, is a moot point."
  • Conservative health care analyst Chris Jacobs has written about why no one should expect a flood of waiver requests. "I think the number of waiver applications will ultimately be higher than zero – but the silence you've heard from governors doesn't engender much confidence that many states will apply," Jacobs told me.

Yes, but: House Freedom Caucus chairman Mark Meadows told Caitlin that more ACA premium hikes could make the waivers more attractive to the states. "Most HFC members believe that giving the states the ability to waive regulations will encourage states to do so as Obamacare premiums increase again this year," he said.

Deconstructing Trump's health care promises

President Trump made some pretty optimistic promises about the health care bill twice this weekend — at his rally in Pennsylvania and on Face the Nation. So it's worth examining what he said, and how likely it is that we'll have to re-examine his promises if the bill becomes law. (Just like we all had to re-examine Barack Obama's "if you like your health plan, you can keep it" when that didn't work out.)

  • Trump: "We're going to get the premiums down, we're going to get the deductibles way down, we're going to take care of every single need you're going to want to have taken care of, but it's not going to cost that kind of money." — at Harrisburg, PA, rally
  • Reality check: Health insurance is a series of tradeoffs — you can have lower premiums or lower deductibles, but usually not both. And if they are both lower, it's usually because the plan covers fewer benefits. It's rare to have a cheaper plan that covers "every single need."
  • Trump: "Pre-existing conditions are in the bill ... They say we don't cover pre-existing conditions, we cover it beautifully." — Face the Nation interview
  • Reality check: Insurers may still have to cover them, but in states that get waivers, people with health conditions could be charged more if they didn't stay insured. And even Trump acknowledged that he wants to leave the ultimate decisions to the states: "If you hurt your knee, honestly, I'd rather have the federal government focused on North Korea, focused on other things, than your knee, okay?"
  • Trump: The danger of higher premiums for 64-year-olds has been "totally fixed." — Face the Nation interview
  • Reality check: The Congressional Budget Office warned that the new tax credit structure could leave the low-income elderly paying way more than they did under the Affordable Care Act. The White House pointed me to the changes made in the House manager's amendment, which would make the medical expenses deduction more generous. That's supposed to steer more money toward low-income seniors, but CBO hasn't finished analyzing the changes to make sure they actually help.
The rising tide of baby boomers

If you follow hospitals, you may have noticed a lot of executives are saying they are "affected by changes in payer mix." That is industry jargon that means a hospital is treating fewer patients with commercial insurance and more patients with government insurance — like more baby boomers on Medicare, Bob Herman reports.

From two recent hospital company reports:

HCA: Medicare represented 48.1% of first-quarter admissions, up from 47% last year. Commercial insurance accounted for 27.4% of first-quarter admissions, down from 28.6% last year.LifePoint Health: Medicare produced 39% of total revenue in the first quarter, up from 37.4% last year. Commercial payers accounted for 45.7% of total revenue in the quarter, down from 46.7% last year.Some financial analysts are partially attributing the rising proportion of Medicare patients to this year's flu season, which has been more severe than expected. But this is really about how more people are retiring and moving onto Medicare from their job-based insurance.

Why hospitals aren't thrilled about this shift: They prefer higher commercial rates instead of having to accept Medicare's lower fixed rates. However, Paul Ginsburg, a health economist at USC and the Brookings Institution, told Bob: "They still want Medicare patients because that's much better than having an empty bed." Also, don't be fooled: Hospitals do not charge private insurers more to make up for lower government payments, and low-cost hospitals can still make money on Medicare.

While you were weekending ...
  • Vice President Mike Pence, on Meet the Press: "I think health care reform, repealing and replacing Obamacare, is just around the corner."
  • Moderate Rep. Fred Upton, former chairman of the House Energy and Commerce Committee, to Bloomberg: "I'm not comfortable with it and I told the leadership that."
  • The Washington Examiner's Byron York writes that the reason the House hasn't been able to repeal the Affordable Care Act is that a lot of Republicans don't want to repeal it.
  • The Washington Post reports that a clinical trial is going to test whether "watchful waiting" is safe for Stage 0 breast cancer.
How an anti-abortion leader got the HHS communications job

Charmaine Yoest has been mainly known as an anti-abortion advocate, not a public relations professional. But the former president and CEO of Americans United for Life is now in line for the top communications job at the Department of Health and Human Services, after President Trump nominated her on Friday to be the assistant secretary of public affairs.

That's partly because other anti-abortion groups, including the Susan B. Anthony List, were pushing the Trump administration to give her a role. And as SBA List spokeswoman Mallory Quigley points out, there's some overlap between the communications skills Yoest will need and the ones she displayed as an advocate. She was a Trump surrogate on the campaign trail, and she held a lot of TV appearance and spent a lot of time talking to reporters during her years as an anti-abortion leader.

Yes, but: Yoest has also run into trouble for claiming that abortion puts women at higher risk for breast cancer, a link that isn't supported by science, according to the American Cancer Society. That background has already made her a lighting rod for Democrats, and it means her credibility is going to be under extra scrutiny in her new job.

The Anthem-Cigna merger is dead ... probably

It wasn't surprising on Friday when a three-judge federal appeals panel upheld the ruling that Anthem's $54 billion takeover of Cigna is anticompetitive and would hurt consumers. What was a little more surprising: The panel wasn't unanimous and instead voted 2-1.

Bob Herman notes that the dissenting judge, Brett Kavanaugh, who was nominated by former president George W. Bush, could nudge Anthem to appeal to the entire circuit court or even the Supreme Court. "I wouldn't be betting my house and car and retirement on it, but (Anthem) clearly received some traction with Judge Kavanaugh," Andrea Murino, a former Department of Justice antitrust attorney, told Bob Herman. Anthem said it is "currently reviewing the opinion and will carefully evaluate our options."

What Kavanaugh wrote: "The record decisively demonstrates that this merger would be beneficial to the employer-customers."

Yes, but: Kavanaugh's line of thinking assumes providers and insurers will "exert countervailing power against the other," which former DOJ antitrust attorney Tim Greaney has called a "dubious" justification for allowing mergers to proceed.

Caitlin Owens

What we're watching this week: Gotta be time for Health Care 4.0, right? Also, Pence speaks at the Susan B. Anthony List's Campaign for Life Gala, Wednesday.

What we're watching next week: FBI director James Comey gives keynote address on health care cyberthreats at the American Hospital Association annual membership meeting, Monday, May 8.

Thanks for reading, and please keep the tips and thoughtful feedback coming: david@axios.com.