Apr 20, 2017

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning ... It's not that hard to solve the coming standoff over whether Congress should fund the Obamacare insurer payments, but that doesn't mean Congress won't make it hard. So — get the government shutdown clock ready, CNN!

And a quick reminder that Vitals is off tomorrow, then we'll return to our regular publishing schedule next week when Congress gets back.

Obamacare payments: Can't we just skip to the end?

It's not that hard to figure out how the standoff over Obamacare payments to insurers is going to end: with a compromise. The betting in D.C. right now is something like this: Republicans agree to fund the payments for the Obamacare cost-sharing subsidies in the upcoming spending bill, but only for a year at a time, not permanently as Democrats want.

So why can't we just fast forward to that part now? I have a story up this morning about why we'll have to go through yet another government shutdown drama to get there. The gist: Democrats want it to be "mandatory" spending that goes out automatically, and that's politically impossible for Republicans — but Republicans are under a ton of pressure to fund the Obamacare payments so the markets don't collapse, and they need Democrats' help to pass the spending bill.

No, health care isn't like "The Art of the Deal"

In today's column, the Kaiser Family Foundation's Drew Altman looks at President Trump's threat to use the subsidies as leverage against Democrats, and explains why that isn't really the way health care dealmaking works. It's not like a real estate deal, he writes, where everything is negotiable. In health care, there are real, deeply felt policy differences, and everyone is so dug in that they're not willing to do a lot of horse trading.

That's why Trump hasn't been able to force a deal with the Freedom Caucus, he writes, and it's why the Democrats aren't any more likely to give in on the marketplace subsidies. Read the piece here.

Look, Tom Price is working on something besides Trumpcare

The Health and Human Services secretary is also working on the opioid crisis. That was the theme of his speech to the National Rx Drug Abuse and Heroin Summit in Atlanta yesterday, where Price announced $485 million in grants from the Substance Abuse and Mental Health Services Administration to help states pay for opioid abuse prevention and treatment. He said a similar amount will go out next year.

The other Trump administration initiative is to cut some of the rules on how doctors can treat patients fighting addiction, Newt Gingrich, who's now a paid spokesperson for Advocates for Opioid Recovery, told the summit. "Trump is trying to cut out things [that] are stupid," Gingrich said, per STAT.

Adeptus … or Adump-tus?

Bob Herman has been closely following the financial meltdown of Adeptus Health, the freestanding emergency room chain that used to be a darling on Wall Street with a $2.5 billion market cap. Well, Adeptus is really close to full-blown "dumpster fire" status.

What's happening: Last week, investment firm Wexford Capital bought more than 40 percent of Adeptus. Wexford, which specializes in troubled companies, said at the time that Adeptus may need to go through bankruptcy, but "the fundamentals of [Adeptus'] business appear to be sound." Fast forward to this week, and Wexford has bailed on every last share it bought. Those fundamentals don't seem so sound anymore.

The bottom line: Wexford didn't respond to questions from Axios. Adeptus has also been extremely tight-lipped and now will officially go through bankruptcy with hedge fund Deerfield Management. But the lesson remains the same: Adeptus' freestanding ER model has been too expensive to manage, and patients have been put off by surprisingly high facility charges.

A cybersecurity startup exposes a hospital's network

Pro tip: When you're a startup that specializes in cybersecurity, maybe don't show off a hospital's private network information. That's what Tanium Inc. did to El Camino Hospital in California, the Wall Street Journal reports in an amazing story that posted last night. Tanium makes software that maps computer networks and finds a company's vulnerabilities, so it presented demos that showed the software working in El Camino's system. But it never had permission to do that — so it ended up exposing the hospital's desktop and server management information to outsiders.

Why Verily has to do its big study of healthy people

There was a lot of discussion yesterday of Verily's Project Baseline, a study of 10,000 healthy people to see what happens to their health over time. The Verge makes an important point about why Verily — Alphabet Inc.'s rebranded version of Google Life Sciences — is funding the study, as opposed to the federal government. It's because government funding of science has been trailing off, to the point where another large-scale study — one in Framingham, Massachusetts, that looks at the causes of heart problems — lost 40 percent of its funding four years ago.

Don't forget the context: Imagine trying to launch a study of this scale now, when members of Congress are trying to keep the Trump administration from gutting the National Institutes of Health. Besides, as the Verge points out, a federally funded study like this would be a hard sell because "it's expensive and because it's hard to predict what studies like this will find."

Caitlin Owens

What we're watching today: Minority Leader Nancy Pelosi and Rep. Lloyd Doggett hold a roundtable on health care in Austin, Texas, including musicians who say Obamacare saved their lives. Mostly watching to see if I still know any Austin musicians.

What we're watching next week: Senate HELP Committee vote on FDA commissioner nominee Scott Gottlieb, Wednesday; Trump press conference on veterans' health care, Thursday.

Thanks for reading, and let us know what's big on your health care agenda: david@axios.com.