12/05/2017 10:00 AM EDT
By DAN DIAMOND (email@example.com; @ddiamond)
CHIP, ALEXANDER-MURRAY UNLIKELY IN DEC. 8 SHORT-TERM SPENDING PATCH - Neither health care effort is expected to hitch a ride with the two-week continuing resolution that Republicans are hoping to enact by Friday to avoid a government shutdown, individuals with knowledge of the negotiations tell POLITICO's Jennifer Haberkorn.
Members of both parties - and a growing chorus of health care advocates - have called for Congress to fund CHIP and pass Alexander-Murray, a bipartisan Obamacare stabilization measure. Sen. Susan Collins on Sunday reiterated that she had won an "ironclad commitment" from GOP leaders to pass Alexander-Murray by the end of the year, in exchange for her support of the tax bill.
The Dec. 22 spending bill will be the next opportunity to tack on either measure, but sources on Capitol Hill say it is too early to know for sure whether either measure definitely makes it on the bill.
Senate Majority Leader Mitch McConnell is confident Congress will hammer out a spending patch this week, but don't expect it to include health care. | AP Photo
DRIVING THE CVS-AETNA DEAL: INTEGRATED CARE DELIVERY OR AMAZON? -
CVS and Aetna are making big claims about how their proposed $69 billion merger will "revolutionize the consumer health care experience." Their main argument: the newly created company will be able to reduce costs and improve outcomes by integrating care delivery through its more than 10,000 stores and clinics. But many health care experts are skeptical about whether that's the main motivation driving the blockbuster deal, POLITICO's Paul Demko tells PULSE.
"I'm not sure what about the merger uniquely enables them to do that," said Martin Gaynor, a health care finance expert at Carnegie Melon University. "CVS, if they wanted to, could do that before."
Many health care observers point to a different motivator: the expectation that Amazon plans to aggressively move into the prescription drug business.
"The specter of an outside disruptor, in the form of Amazon's rumored venture into the pharmaceutical supply chain business, has increased the imperative ... to demonstrate that [companies] are reducing the inefficiencies that contribute to the high cost of U.S. health care," Fitch Ratings commented.
Keep reading: More for Pros from Paul and Darius Tahir.
- Experts doubt regulators will scuttle the blockbuster deal. That's in large part because CVS and Aetna don't compete head-to-head in their core areas of business. But Robert Town, an antitrust expert at the University of Texas at Austin, says the specter of Amazon moving into the sector complicates efforts to analyze the competitive effects of the deal.
"It's hard to evaluate the competitive response of somebody who's not there," Town said.
- New partners, old idea? The concept of putting insurance and health care services under the same roof is nothing new, POLITICO's Adam Cancryn notes. Hospitals have long tried to run their own insurers as a way of streamlining care, to varying degrees of success, while insurers have acquired physician practices or other providers.
For instance, health care giant UnitedHealth has systematically snapped up everything from home health agencies to surgery centers and doctor groups, along with running its own pharmacy benefits manager and data/consulting operation. While that's boosted UnitedHealth's bottom line, it hasn't revolutionized the way people purchase coverage and receive care - and there's little evidence so far that Aetna and CVS will be the ones to radically change the game.
"Things change glacially in health care," said Steven Halper, an analyst for Cantor Fitzgerald. "Competitively, this doesn't change the managed care industry at all in the near term, and there'll be a lot of skepticism regarding CVS' ability to make this work."
- How Wall Street sees it:
Fitch Ratings noted the positive aspects of the deal, but signaled that Aetna could be downgraded, given the significant amount of debt involved in the transaction. The ratings agency also said the deal could be perceived as the latest "shot across the bow" for the stand-alone pharmacy benefit manager model, which lawmakers have repeatedly attacked. According to the PBM model's critics, it's too opaque and rewards those companies as drug costs go up.
** A message from PhRMA
: A medicine's path from the biopharmaceutical company to the patient involves many entities across the supply chain. A new report examines how money flows through this system - which includes wholesalers, pharmacy benefit managers, pharmacies and insurers - and how that impacts what patients pay at the pharmacy. Read more. http://onphr.ma/2nmDqGU **
THIS IS TUESDAY PULSE - Where we don't care what the AP stylebook
decides: Health care will always be two words to PULSE.
Carenot for healthcare as twowords? Wrong answer, and it doesn'ttake a doctor tospot theobvious problems. Meanwhile, sendtips to firstname.lastname@example.org or @ddiamond on Twitter.
With help from Renuka Rayasam (@RenuRayasam), Paul Demko (
@PaulDemko), Victoria Colliver (@vcolliver), Adam Cancryn (@AdamCancryn), Brianna Ehley (@briannaehley), David Pittman (@David_Pittman) and Jennifer Haberkorn (
INSIDE THE HUMPHREY BUILDING
Reproductive health groups to push back against Trump administration's contraception rules. Planned Parenthood, NARAL and more than a dozen other groups will be outside the Humphrey building at 10 a.m. to protest the interim final rule on the ACA contraception mandate. Under the rule, nearly any employer or university can obtain an exemption to the mandate.
Today is the final day of public comment
on the rules, and the groups have vowed to submit "hundreds of thousands" of comments against them. A protest message was projected on the side of the building last night. See photo.
Midwest: Advocate, Aurora announce latest hospital mega-merger. Illinois-based Advocate Health Care and Wisconsin-based Aurora Health Care - the largest health systems in their respective states - on Monday said they're planning to merge by next summer, pending regulatory approval.
Advocate Aurora Health would be the nation's 10th largest not-for-profit health system, with 27 hospitals, about 500 care sites and $11 billion in annual revenue. The merger would be "50-50," the systems told reporters on Monday, with neither organization paying the other and the current leaders staying on to serve as co-CEOs.
- It's Advocate's second attempt at a would-be mega-merger
: The system is based in the Chicago suburbs and attempted to combine with nearby NorthShore University HealthSystem, but the deal was challenged by the FTC and ultimately scrapped after a judge blocked it in March. Advocate's merger with Aurora might be more palatable to regulators given that the two systems operate in different states.
While hospital mergers generally lead to higher prices for patients, as larger systems exert their negotiating leverage with local insurance companies, Advocate CEO Jim Skogsbergh vowed that patients wouldn't see price increases as a result of the deal.
Texas: Hurricane Harvey's effects led residents to delay necessary care.
That's according to a survey from the Episcopal Health Foundation and Kaiser Family Foundation, which tracked how the August storm - which devastated dozens of counties in Texas with already high uninsured rates - has hampered people with conditions such as anxiety or asthma.
POLITICO's Renuka Rayasam reviewed the survey and found:
- About 13 percent of people surveyed said that they felt their mental health had worsened as a result of the storm, with 7 percent saying they've increased their alcohol use.
- Residents also said that they are experiencing an increase in respiratory conditions such as asthma or allergies.
- Nearly 60 percent of those surveyed with a health condition or that has a family member with a health condition say that they are putting off care, not filling prescriptions or having trouble getting mental health care, according to the survey.
About 39 percent of residents in Texas counties affected by the storm lack health insurance, according to the survey. More.
California: CalPERS and value-based pricing.
A new Health Affairs study compared two benefit designs used by the California Public Employees' Retirement System to steer patients to so-called high-value providers to help control the costs of hip and knee replacement surgeries.
Both approaches - using reference-based pricing for PPO members, and sending HMO members to "centers of excellence" - prompted higher use of designated lower cost/higher quality centers by CalPERS members, POLITICO's Victoria Colliver notes. They also reduced average expenses per member, both for the plan and the system, but by different means: reference-based pricing lowered payments to the facilities, while the HMO model lowered member utilization rates.
TRUMP WON'T REQUEST NEW MONEY FOR OPIOIDS - President Donald Trump doesn't plan to request new funding from Congress to fight the opioid epidemic, an HHS spokesperson told POLITICO's Brianna Ehley.
On Monday, acting HHS Secretary Eric Hargan told reporters during a press briefing that it was up to Congress to propose additional resources to address the crisis. But it's not clear if Congress will consider appropriating additional funds in a year-end spending bill.
- Senate appropriators talk opioids: Today's Senate Appropriations subcommittee will focus on the resources needed to combat drug misuse. The Senate appropriations bill approved by the committee earlier this year kept funding for opioids mostly flat and it's not clear if lawmakers will propose additional funds. The witness panel includes: NIH Director Francis Collins, HHS Assistant Secretary for Mental Health Elinore McCance-Katz, former Rep. Patrick Kennedy and the CDC's Debra Houry.
Hospitals report spike in opioid deaths. According to a new Health Affairs study, deaths from opioid-driven hospitalizations quadrupled between 2000 and 2014, with mortality rising to about 2 percent of all opioid hospitalizations, including the emergency department.
The study found that many of the patients admitted to the hospital for opioid poisoning tended to be white and between the ages of 50 and 64, many were on Medicaid. Opioid addiction and misuse were among the other causes for hospitalizations.
Senate HELP Committee announces Grace Stuntz as new health policy director. Stuntz previously served as deputy health policy director and senior FDA policy adviser for the committee, where she's worked since 2011. In a statement, Senate HELP Committee chairman Lamar Alexander singled out Stuntz's work to combat the opioid crisis.
Bipartisan Policy Center adds Risa Lavizzo-Mourey, Michael Steele to its board.
Lavizzo-Mourey is the former CEO of the Robert Wood Johnson Foundation, while Steele was chairman of the Republican National Committee.
In the New York Times, Aaron Carroll writes about how the threat of lawsuits is scaring away some researchers from doing important work. More.
Shocker: Health care prices remain difficult to find online, according to a new JAMA Internal Medicine study, Reuters reports. More.
GOP Sens. Jerry Moran and John McCain are introducing a bill to reform the VA health system.
Big-city hospitals find asthma hot spots more profitable to neglect than fix, Jay Hancock of Kaiser Health News and colleagues write. More.
** A message from PhRMA
: In the competitive marketplace for medicines, negotiations between pharmacy benefit managers (PBMs) and biopharmaceutical companies result in substantial rebates and fees. According to a new report, in many cases, this system often creates incentives for PBMs to prefer medicines with higher list prices and higher rebates. Read more about how money flows through the supply chain here: http://onphr.ma/2nmDqGU **