Vitals - Axios

Axios Vitals

Vitals

Good morning ... Yes, Sen. John McCain's diagnosis — brain cancer, discovered after surgery to remove a blood clot above his eye — changes the calculus for the Senate's health care bill. But above that, our thoughts are with McCain and his family. Health policy is hard; cancer is harder.

We wish him the best and hope he'll be back here soon cracking jokes and somehow managing to yell at us with affection, as only he can.

Damn the torpedoes

Lazaro Gamio / Axios

A chorus of experts, actuaries, independent analysts, governors, and voters are all lined up against both of the health care bills the Senate might vote on. They say the bills would lead to millions of people losing coverage, make it harder for the poor and the sick to get coverage at all, and raise deductibles and maybe premiums. Voters say they don't want it. And yet Senate Republicans are plowing ahead.

Behind the scenes: Aides are frustrated, and candidly skeptical that a deal is achievable at this point. One senior GOP aide referred to the repeal-and-replace bill — as well as a straight-repeal bill the caucus is now also considering — as "corpsicles." Another aide said, "It's a terrible idea to make people vote for the 2015 [repeal] bill" and that last night's attempt to revive the replacement bill was a "death rattle."

"They can't accept they've been promising something that is undeliverable and a bad idea for seven years," one well-connected former GOP aide told Axios' Caitlin Owens.

Bottom line: Congressional Republicans aren't listening. They're ignoring health care experts, industry groups, governors from both parties, and voters. They seem to have decided passing something — anything — is better than failure. The irony is that if they succeed, and everyone else was right about the effects of this bill, they'll own the disastrous consequences.

"Governors, industry, and policy experts are not really the right experts for the problem at hand. This is no longer about salvaging what is left of the individual market. This about salvaging what's left of the Republican Congress," one health care lobbyist said.

The pitch to the holdouts: Let the Senate debate the bill

Our colleague Jonathan Swan reports that the White House and McConnell spent the day making one argument to the moderate and conservative Republicans who don't like the health care bill: Just let the Senate take it up. It was less about trying to solve everyone's objections — and trying to strike one mega-deal that satisfies everyone — than convincing them to let the debate start.

Main talking point: The bill can change, and they'll have virtually unlimited chances to amend it once the debate starts — that's the purpose of the "vote-a-rama." But if the holdouts don't vote for the motion to proceed, they're saying by default that they think the status quo, under the Affordable Care Act, is acceptable. If they don't think they can convince other senators that their view is right, don't deny colleagues the right to make their own case on the Senate floor.

But that's not all: There's a good chance that Republicans will add money to the bill to satisfy the moderates. The Hill reports it could be as much as $200 billion for states that expanded Medicaid.

Readout of last night's meeting: Sen. Dean Heller, when asked whether the bill is moving toward addressing his concerns, said: "I don't have a response. And it's not because I'm undecided – all I'm trying to do is get all the information I possibly can before I make a decision."

The allure of health care for tech giants

Rebecca Zisser / Axios

There are reasons Amazon, Apple, Google, Microsoft, and other tech giants aren't more deeply immersed in health care (and have failed in some past projects). Health care has a lot of spending concerns, regulatory hurdles, and life-and-death decisions that aren't a part of running a website or making an iPad.

But Bob Herman reports this morning that health care has a lot of appeal, both from the money to be made and the prospect of helping keep people healthier by analyzing health care data. The industry has moved a lot of its records from paper to digital form, but many people think the information could be made a whole lot more useful and shareable.

Look ahead: If a major tech conglomerate wanted to take a bigger gamble on health care, there are a lot of ways to get in the industry right now. There's already speculation among industry analysts that Apple could try to buy Athenahealth, which makes cloud-based electronic health records for physician offices and small hospitals.

Trump's mixed signals

Congressional Republicans are trying to come up with a strategy, insurance companies are trying to figure out what's next for their business, the federal bureaucracy is trying to figure out what its leader wants from it — and President Trump isn't helping any of them find an answer.

Just within the past week, Trump has changed his mind thrice about what should happen next in the repeal-and-replace effort:

  • Monday: "Republicans should just REPEAL failing ObamaCare now & work on a new Healthcare Plan that will start from a clean slate."
  • Tuesday: "As I have always said, let ObamaCare fail and then come together and do a great healthcare plan. Stay tuned!"
  • Wednesday: "We can repeal it, but we should repeal it and replace."

A similar dynamic is playing out with the ACA's cost-sharing subsidies. Trump has been funding the program, and yesterday agreed to make this month's payments. But he'll only commit to those payments one month at a time, meaning insurance companies can't really count on the money being there — and that predictability is almost as important to them as the money itself.

Why it matters: This back-and-forth between stability and instability isn't fully achieving either outcome, and it's not benefitting anyone — including Trump. His administration and his party are both putting themselves through a pretty insane process to try to deliver him a "win," but if he won't decide where he wants to go, they can't help him get there.

Conservative groups to moderates: We're watching you

Giphy

Here's another source of pressure on the Senate moderate holdouts: Conservative groups are leaning on them hard to stop blocking ACA repeal, and threatening primary challenges if they keep it up. They're targeting Shelley Moore Capito, Lisa Murkowski, and Rob Portman. These are the three senators who voted for a clean repeal of the ACA in 2015 — when then-President Obama vetoed it — but have indicated they wouldn't support it now.

Here's what some of the conservative leaders had to say yesterday on a conference call with reporters:

  • David McIntosh, Club for Growth: "A vote against moving forward with this bill is a vote that says, 'I want Obamacare.'"
  • Jenny Beth Martin, Tea Party Patriots: "It was good enough 18 months ago. What's changed?"
  • Ken Cuccinelli, Senate Conservatives Fund: "The solution is good conservative candidates in primaries with these folks."
  • Jason Pye, FreedomWorks: The group will count the vote on the motion to take up repeal as a "key vote" for its supporters. He also called the three senators the "Senate Traitor Caucus," and vowed to bring "Freedom Traitor Awards" and busts of Benedict Arnold to their offices if they vote against it.

For your calendar: Here's when the three senators are actually up for re-election:

  • Capito: 2020
  • Murkowski: 2022
  • Portman: 2022

​Haven't you heard of "no risk, no reward?"

The consulting firm Avalere looked at the accountable care organizations program — where networks of hospitals and doctors work together to lower unnecessary health care costs — and found that physicians could have made more money if they had taken a bit more risk.

In an analysis released yesterday, the firm found that ACOs could have earned an additional $886 million in 2015 if they'd gone the riskier route.

The back story: These networks can either choose a track where they don't have to pay back any losses to Medicare, or the "two-sided risk" track, where they would have to pay some of the losses back. Most ACOs choose the safer track, but on the riskier track, they can get bonus payments and also a greater percentage of the money they save.

What we're watching today: Senate Appropriations Committee marks up FDA funding bill, 10:30 a.m. Eastern. Livestream here. Athenahealth earnings report, Thursday after markets close.

What we're watching next week: House Energy and Commerce health subcommittee hearing on Medicare Advantage Special Needs Plans, Wednesday, July 26.

Tell us what else to add to the radar: david@axios.com, baker@axios.com.