Health Brief: Week in Review & What’s Ahead

Week in Review

Focus on Obamacare stability

  • The Trump administration announced a 90-percent spending cut in advertising and promotion for enrollment under the Affordable Care Act, a move that critics argue is an attempt to sabotage the law ahead of the November start of the enrollment period. The advertising budget is being cut from $100 million to $10 million, and grants to approximately 100 nonprofit groups that help people enroll for Obamacare coverage are also being reduced to $36 million from roughly $63 million.
  • A bipartisan group of eight governors unveiled a health care plan that calls on Congress to extend funding for cost-sharing reduction payments to insurers for at least two years, and to establish a fund to help states shore up their exchanges, among other proposals. The plan, outlined in a letter to congressional leaders, could help serve as a blueprint for upcoming bipartisan efforts in Congress to stabilize the ACA exchanges.

Houston-area providers stretched thin by Harvey

  • Hurricane Harvey placed intense strain on Houston’s health care system, as hospitals struggled to deliver care amid flooding. The rising waters impeded cancer and kidney-dialysis treatments, stalled ambulance traffic and raised concerns among hospital officials about food and drug shortages.
  • The storm could hurt the financial outlook for Houston’s already strained hospitals, which have been struggling to deal with uncertainty regarding the future of Obamacare, the region’s shrinking energy sector and Texas’ high percentage of uninsured, forcing them to cut thousands of jobs this year.

Health care acquisitions and partnerships

  • Gilead Sciences Inc. agreed to buy biopharmaceutical company Kite Pharma Inc. for $11.9 billion. The acquisition steers Gilead away from antiviral treatments, which have been central to the drugmaker’s business for more than a decade, to a promising but risky cancer therapy.
  • Health giant UnitedHealth Group Inc. intends to buy the Advisory Board Co.’s health care consulting business for about $1.3 billion, with plans to fold the operation into its OptumInsight arm. This could concern some Advisory Board clients, especially those who compete with UnitedHealth’s insurance unit, regarding how they could be affected by the acquisition.
  • North Carolina hospital operators UNC Health Care and Carolinas HealthCare are partnering to form one of the largest not-for-profit health care systems and research institutions in the country. Executives for both systems insisted the deal is not a merger, but similar arrangements have been heavily scrutinized by regulators in other states.

Companies under scrutiny

  • The Food and Drug Administration released a warning letter it sent to U.S. Stem Cell Inc. for selling and injecting unapproved stem-cell treatments. FDA Commissioner Scott Gottlieb said more enforcement is coming, suggesting the agency plans to more closely regulate stem-cell research, which uses the body’s own cells and tissues to help treat a wide variety of diseases or conditions.
  • Aetna was slapped with a federal class-action lawsuit over allegations the health insurer exposed the HIV status of thousands of its customers through letters with clear envelope windows. The suit claims the breach impacted up to 12,000 people in 23 states.
  • Abbott Laboratories released software updates to protect hundreds of thousands of implanted pacemakers from cyber hacks. About 465,000 pacemakers are eligible for the update, which was released after federal health regulators warned Abbott earlier this year about safety risks to products it acquired when it bought St. Jude Medical in January.
  • Novartis AG said its groundbreaking cancer-fighting gene therapy, which was approved by the Food and Drug Administration last week, would cost $475,000 for a course of treatment. While the price could seem staggering to patients, it is far less than the $750,000 a dose some analysts expected.

What’s Ahead

  • The Senate Committee on Health, Education, Labor and Pensions will hear from state insurance commissioners and governors as part of a crunch-time effort to stabilize the ACA’s exchanges, with the first hearings scheduled for Sept. 6-7. The bipartisan push could become more challenging if Republicans try to take another shot at repealing and replacing Obamacare.
  • The Senate Finance Committee is expected to hold a hearing this week on the Children’s Health Insurance Program, which is slated to run out of funding at the end of September. Lawmakers still have to reach a deal on the CHIP reauthorization, a task that could be complicated by other major issues that Congress needs to settle by Sept. 30 — raising the debt ceiling, funding the government and disaster relief for areas hit by Hurricane Harvey.

Events Calendar (All Times Local)

Federal holiday — no events scheduled
No events scheduled
Senate HELP Committee hearing with insurance commissioners on ACA stabilization 10 a.m.
Senate Appropriations subcommittee HHS spending bill markup 11 a.m.
Cato Institute event on health insurance effect on mortality 12 p.m.
Senate HELP Committee hearing with governors on ACA stabilization 9 a.m.
Senate Finance Committee hearing on reauthorizing CHIP 10 a.m.
Senate Appropriations Committee HHS spending bill markup 10:30 a.m.
Govs. Hickenlooper, Kasich discuss bipartisan ACA plan 9 a.m.
NIHCM webinar on cancer care 1:30 p.m.

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Morning Consult Health Top Reads

1) Trump Administration Sharply Cuts Spending on Health Law Enrollment
Abby Goodnough and Robert Pear, The New York Times

2) Pressure Grows to Fund Children’s Health Program
Stephanie Armour, The Wall Street Journal

3) The odds are against a simple ACA stabilization bill
David Nather, Axios

4) Trump Administration Wants to Stabilize Health Markets but Won’t Say How
Robert Pear, The New York Times

5) In Trump states, Sanders tries to push Democrats to the left on health care
David Weigel, The Washington Post

6) Storm Harvey could financially hurt already strained Houston hospitals
Ernest Scheyder and Jilian Mincer, Reuters

7) Hickenlooper’s next major test is his national health care proposal. Can he win over both parties?
John Frank, The Denver Post

8) Gilead Tries to Repeat Home Run With $11.9 Billion Kite Deal
Caroline Chen et al., Bloomberg

9) State-run Obamacare exchanges outline fixes
Robert King, Washington Examiner

10) Tenet Healthcare CEO to Step Down as Activist Flare-Up Continues
Austen Hufford and David Benoit, The Wall Street Journal


Correction: A previous version of this brief misstated which congressional panel is scheduled to markup the HHS spending bill on Sept. 7.