Thursday, January 19, 2017

Feel The Bern! No Right to Health Care in Canada

On Wednesday, I watched the Senate’s Health, Education, Labor, & Pensions (HELP) Committee’s courtesy hearing for Dr. Tom Price, MD, whom President-elect Trump has nominated to be the next United States Secretary of Health & Human Services. As a game of “gotcha,” the hearing played out predictably.

However, Senator Bernie Sanders (I-VT) stood out for asking a pointless “question” (actually a statement), which was because it was based on an error. As he has many times, Senator Sanders made the false claim that health care is a right in Canada and other countries outside the United States. According to Mr. Sanders, this is a unique stain on the United States.With respect to Canada, it is simply and plainly not true that health care is a “right.”

Wednesday, January 18, 2017

CPI: Moderate Health Price Inflation

The Consumer Price Index rose 0.3 percent in December. Medical prices rose only 0.2 percent. This is the fourth month in a row we have enjoyed medical price relief. Even prices of prescription drugs rose by only 0.2 percent. Prices of health insurance even dropped a smidgeon!

Prices for medical care commodities rose the most, by 0.6 percent, followed closely hospital services (0.3) percent).

Over the last 12 months, however, medical prices have increased over twice as fast as non-medical prices: 1.9 percent versus 4.1 percent. Price changes for medical care contributed 16 percent of the overall increase in CPI.

Many observers of medical prices decline to differentiate between nominal and real inflation. Because CPI is has been low until recently, even relatively moderate nominal price hikes for medical care are actually substantial real price hikes. More than six years after the Affordable Care Act was passed, consumers have not seen relief from high medical prices, which have increased over twice as much as the CPI less medical care since March 2010, the month President Obama signed the law.

(See Figure I and Table I below the fold.)

Graham To Testify at House Ways & Means Oversight Subcommittee Hearing January 24

I will be testifying in person on Capitol Hill on January 24 at 2 p.m. EST. The topic will be Obamacare's individual mandate to buy health insurance.

Come in person or watch online: More details at this link.

Tuesday, January 17, 2017

Council of Economic Advisers' Bad Obamacare Economics

President Obama’s Council of Economic Advisers (CEA) has issued its valedictory report on the state of Obamacare. The gist of the argument is that Obamacare is doing fine, on the verge of overcoming its growing pains.

The CEA claims critics who suspect the 25 percent increase in premiums for 2017 are a problem are off-base. In a normal insurance market, this would indicate a “death spiral”: The sick enroll and the healthy stay away, causing next year’s premiums to increase. The cycle repeats itself until only the sickest enroll. The CEA asserts this cannot be occurring because 11.3 million people enrolled in Obamacare last December, which was 300,000 more than in December 2015. Further, insurers underpriced their policies in 2014 because the market was new. However, they have learned since then and are pricing policies more realistically.

While it is true enrollment in Obamacare’s market is a little higher than last year, it is still well below the Congressional Budget Office’s estimate of 21 million enrollees in 2016, which it made as recently as March 2015. Even in January 2016, it estimated 13 million would enroll last year, which was almost one fifth too high.

Friday, January 13, 2017

PPI: Pharmaceutical Prices Drop!

December’s Producer Price Index rose 0.3 percent. However, prices for most health goods and services grew slowly, if at all. Fifteen of the 16 price indices for health goods and services grew slower than their benchmarks.*

The outlier was health and medical insurance for final demand, which increased by 0.2 percent, the same rate as final demand services (less trade, transportation, and warehousing.) The largest decline (relative to its benchmark) was for prices of new health care building construction, which declined twice as fast as prices of overall building construction did.

Prices of hospital outpatient care and nursing home care declined versus their final demand services (less trade, transportation, and warehousing) and also absolutely. Pharmaceutical prices decreased 0.1 percent, a 0.4 percent drop versus the price increase for final demand goods less food and energy.

See Table I below the fold:

Thursday, January 12, 2017

Veterans Deserve Better Health Care

(A version of this column was syndicated by the Tribune News Service.)

President-elect Trump has nominated David Shulkin, MD, to be the next Secretary of Veterans Affairs. In 2015, Doctor Shulkin was nominated by President Obama to be Under Secretary of Health in the VA (the position he currently holds). It is an interesting choice, not only because Mr. Trump is calling on an Obama appointee to take the top job in the VA, but also because it recognizes veterans’ health care is the major pain point in the department.

Can veterans hope for better reform than just more tinkering with the current bureaucracy? Or will they have the opportunity to liberate themselves from it? No other public servants, active or retired, are forced to go to government-owned hospitals for care. Why veterans?

Monday, January 9, 2017

Government Failure In Public Health: Zika

Other than anarcho-libertarians, most agree that government has a role to play in preventing and suppressing epidemics, a classic public-health problem. Viral or bacterial infections are not passed from animal to person, or person to person, by voluntary exchange. Instead, proximity to another’s infection can lead to an individual’s becoming infected, notwithstanding any market interaction.

So, even the most freedom-oriented individuals accept government spending and restrictions on individual choice when the threat of epidemic increases. In 2014, the arrival at Dallas-Fort Worth airport of a man carrying the Ebola virus caused some lawmakers to seek a ban on air travel from countries where Ebola had broken out.