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Earlier today we learned that President Donald Trump has selected a former pharmaceutical executive to lead the Department of Health and Human Services and “lower drug prices.”
My VoxCare co-author Dylan Scott has the scoop on the nominee, Alex Azar, an alum of drug company Eli Lilly and the George W. Bush administration:
Azar worked for Eli Lilly, one of the 15 largest drug companies in the world, for a decade, according to Bloomberg. He oversaw US operations before stepping down in January. He also served on the board of the biopharmaceutical industry trade group BIO, according to Politico.
During the George W. Bush administration, Azar served as general counsel and deputy secretary at HHS. He also clerked for Supreme Court Justice Antonin Scalia earlier in his career.
Trump has sporadically railed against high drug prices.
“They’re getting away with murder. Pharma has a lot of lobbies and a lot of lobbyists and a lot of power,” Trump said back in January before he took office.
But since getting into office, Trump has not taken any significant steps to reduce pharmaceutical prices. Meanwhile, Azar (as Bob Herman at Axios notes) worked at Eli Lilly when it was accused of colluding with other drug companies to set high prices for insulin, which could make the life-saving drug incredibly expensive for diabetics.
Aside from Trump’s occasional pharma-bashing, there seems to be little appetite within the administration and the Republican Party to take steps to bring down drug prices (which would near certainly require more government involvement in health care).
In other words: Lowering drug prices is not a clear part of the Republican vision for health care. But what I want to write about today is two great articles that do show what the conservative vision for health care looks like — the type of policies we could expect from the Trump administration and Health and Human Services in the coming months and years.
The first article comes from Erin Mershon at Stat News, who dug into the Tennessee Farm Bureau Health Plans. These are among a small handful of insurance plans left in the country that — due to some weird quirks in state law — don’t have to cover Obamacare’s essential health benefits or accept people with preexisting conditions. They look a lot like the bare-bones plans that many envisioned under the Republican proposals to repeal and replace the Affordable Care Act and the short-term plans that the Trump administration is aiming to expand by executive order.
Mershon went to Tennessee to see how they were working. She found that healthy people like these cheaper, skimpier health plans. But siphoning off those healthier consumers seemed to hurt the market overall. Here’s how one health insurance executive, Jerry Burgess, described the problem:
But Burgess ran into the exact problems Democrats have long warned about when it comes to unregulated health plans: While the healthy Lindseys of the world flock to the cheaper, skimpier Farm Bureau plans, or stuck with older policies, his and other compliant plans got stuck with the older, sicker individuals, like Yates.
“Here we are, a brand-new health care company on the exchange, following all of the requirements — essential benefits, guaranteed issue, the taxes and everything,” Burgess remembered. Farm Bureau and others offering noncompliant plans, meanwhile, “didn’t have to comply” with those regulations.
“We got the sicker folks,” he said.
Right now, there is an executive order from the president to allow plans with similar features to be sold across the country. Much of the work of implementing that policy would fall to someone like Azar at Health and Human Services, which deals with most insurance regulations. When I think of the future of HHS under Azar, I think about regulations like this one.
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I also think about the future of Obamacare’s cost control experiments, another place where we can see what the future of health policy would look like under Trump’s HHS.
Kate Zernike and Abby Goodnough report for the New York Times today on how the Trump administration has quietly, and with little fanfare, slowed or stopped Obama-era programs to reduce health care spending:
The administration has proposed canceling or shrinking Medicare initiatives that required doctors to accept lump sums for cardiac care and joint replacements, two of Medicare’s biggest cost drivers. More than 1,100 hospitals were scheduled to take part in the cardiac initiative starting in January, and 800 have been participating in the joint replacement program.
And while Congress passed a bipartisan law in 2015 creating a new payment framework that is supposed to reward doctors for value over volume, Mr. Trump’s Department of Health and Human Services has exempted more doctors from a provision that created merit pay by giving them bonuses or penalties depending on the quality of their work.
Former Health and Human Services Secretary Tom Price was often a critic of these programs even before he joined the Trump administration. When serving in Congress, he frequently spoke out against the Center for Medicare and Medicaid Innovation, a hub for many of these cost-cutting experiments, arguing that it gave the federal government too much power.
Before joining Congress, Price worked as an orthopedic surgeon. These specialists often opposed these cost-cutting programs, and may have had a sympathetic ear with former Secretary Price.
I’m curious to see where Azar leads the agency on these matters. Will he continue on Price’s path, dismantling these experiments to reduce health costs? Or will his background lead him to different policy decisions, perhaps make him more amenable to keeping these programs around?
It is decisions like these that I expect to take up much of a future HHS secretary’s time — and not decisions about how to reduce drug prices. Nevertheless, these are important decisions, and ones that will continue to shape the future of American health care.
Chart of the Day: Medicaid expansion significantly reduced unpaid medical bills
Medicaid expansion isn’t just about doctor visits. A new working paper from economists Kenneth Brevoort, Martin Hackmann, and Daniel Grodzicki finds that Medicaid expansion “reduced unpaid medical bills sent to collection by $3.4 billion in its first two years, prevented new delinquencies, and improved credit scores.” The paper is a helpful reminder that Medicaid is as much of a financial insurance program as it as access to health services. Read the paper here.
Your daily top health care reads, with research help from Caitlin Davis
News of the day
- “Trump picks ex-pharma executive Azar to lead HHS”: “President Donald Trump on Monday nominated former pharmaceutical executive Alex Azar to be his next Health and Human Services secretary, moving to stabilize the agency at the center of his administration’s biggest domestic policy failure.” —Adam Cancryn and Sarah Karlin-Smith, Politico
- “Supreme Court agrees to hear antiabortion challenge to California disclosure law for pregnancy centers”: “The Supreme Court agreed Monday to hear an antiabortion group’s challenge to a California law that requires “crisis pregnancy centers” to notify patients that the state offers subsidies for contraception and abortion. The challengers say the disclosure law violates the 1st Amendment because it forces the faith-based pregnancy centers to send a message that conflicts with their aim of encouraging childbirth, not abortion.” —David G. Savage, Los Angeles Times
- “New group advocates for $45B to fight opioid epidemic”: “The newly formed Opioid Network has a number of requests aimed at curbing the opioid crisis, such as $45 billion over 10 years, the passage of a bipartisan insurance market stabilization bill and no cuts to Medicaid, the health insurance program for low-income and disabled Americans.” —Rachel Roubein, the Hill
Analysis and longer reads
- “Marketing ‘Obamacare’ With Less Help From The Feds”: “Many states have been patching together public relations as they’re able: stretching the limited federal funds, relying on volunteers, or filling gaps from their state treasuries. And they’re fighting not only a lack of resources, but also persistent rumors, driven by the unsuccessful “repeal and replace” effort in Congress, that the Affordable Care Act is dead or dying.” —Elaine S. Povich, Huffington Post
- “Pharmaceutical Industry Profits And Research And Development”: “The combination of current benefit designs and very expensive drugs means that raising prices even higher may not lead to fewer units. The likely result is higher revenues and more investment in development of new drugs because they promise to be so profitable.” —Richard Frank and Paul B. Ginsburg, Health Affairs
- “Government ban on gun violence research funding leaves doctors with fewer tools when counseling patients”: “A de facto ban on government-funded research on firearm injury that Congress put into effect in 1996 has left a dearth of evidence on how best to identify risk factors in patients, or the most effective strategies providers could employ when counseling patients about gun violence.” —Steven Ross Johnson, Modern Healthcare
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