Monday, December 29, 2014

Last Week's GDP Estimate Included A Massive Upward Revision in Health Spending

Due to the Christmas break, we did not discuss last week’s third estimate of 3rd quarter GDP when it was released on December 23. The media noted the big headline jump in the real (inflation-adjusted) increase in GDP, from a 3.9 percent in the second estimate to 5.0 percent in the third estimate.

November’s second estimate of 3rd quarter GDP included moderate health spending growth. The third estimate blows that out of the water. Much of the upward revision to the GDP estimate was due to health spending.

Read the entire article at NCPA's Health Policy Blog.

Friday, December 19, 2014

This Photo Tells You What You Need To Know About Obamacare's Perverse Incentives


One theme of NCPA’s Health Policy Blog is that health insurers in Obamacare’s exchange plans have perverse incentives to attract healthy patients and deter sick ones from enrolling.

If this photo does not tell us that insurers want healthy people to apply, I don’t know what will.

Read the entire column at NCPA's Health Policy Blog.

High Taxes, Lack of Federal Bailout Make Vermont Abandon Plans For Single-Payer Health Care

Vermont Governor Peter Shumlin has cancelled his longstanding plan to impose government-monopoly health care in the Canadian border state.

Read the entire article at NCPA's Health Policy Blog.

Thursday, December 18, 2014

The U.S. Regulates Health Technology Under A Law Signed By Gerald Ford

1976: The United States celebrated the bicentennial of our independence; Jimmy Carter was elected president; young men wore bell bottoms and middle-aged ones wore leisure suits; advertising encouraged women to smoke Kool cigarettes. And the Food and Drug Administration (FDA) first regulated medical devices.

Although we fantasized about having Captain Kirk’s communicator or Dr. McCoy’s tricorder, nobody would have known what to do with an actual smartphone or tablet, had they existed in those days. Today, increasing numbers of us use them to keep track of medical information, to remind us to take our meds or do countless other tasks important to our health. In 2013, the Apple app store had 97,000 mobile health apps, and over 60 percent of physicians were using tablets.

And yet, the FDA is still regulating these 21st century technologies under legislation passed when Wings’ Silly Love Songs topped the pop music charts. It’s past time for Congress to amend the Food, Drug and Cosmetic Act to clarify the FDA’s regulatory authority over these new tools for our health.

Read the entire column at Forbes.

CROmnibus and Cronyism for Blue Health Plans?

Despite the end of Obamacare’s “bailout” for health insurers, some of our friends who seek to repeal and replace Obamacare insist on finding a crony capitalist under every bed and in every closet.

Yuval Levin, at National Review Online, appears to have been the first to identify an adjustment to an insurance regulation, buried in the CROmnibus, as “cronysism” for non-profit Blue Cross and Blue Shield health plans. This has been picked up by Louise Radnofsky at the Wall Street Journal and Timothy P. Carney at the Washington Examiner.

If there is cronyism here, I don't see it.

Read the entire column at NCPA's Health Policy Blog.

Tuesday, December 16, 2014

Bye, Bye "Bailout": CROmnibus Takes a Small But Important Bite Out of Obamacare

The CROmnibus, with which the lame-duck Congress keeps the government open in 2015, takes small but important steps to repeal Obamacare. For the short term, the most important anti-Obamacare achievement is eliminating taxpayers’ liability for Obamacare’s risk corridors, often described as a “bailout,” to health insurers participating in Obamacare’s exchanges.

Read the entire column at NCPA's Health Policy Blog.

Hiring in Ambulatory Clinics Back on Track in November, Other Health Jobs Lagging

Last Friday’s employment report caused some joy in the land: 321,000 jobs were added in November. My Forbes colleague Bruce Japsen cheered an “Obamacare jobs bump” in health services. If true, this would be an example of Bastiat’s broken-window fallacy: Broken windows create employment for glaziers, so the government should encourage breaking windows.

Read the entire article at NCPA's Health Policy Blog.

How Obamacare Hurts Its Beneficiaries: Two Vignettes

his week, the mainstream media ran two stories about two Obamacare “beneficiaries” who were actually victims.

First, a woman whose husband is already extremely sick, and was subject to the risk of being unable to buy health insurance in the individual market if he lost his employer-based benefits.

Second, a woman explaining how Medicaid, expanded by Obamacare, “forces families like mine to stay poor“. Her pregnant sister-in-law suffered a tragic car accident, and fell into the social-safety net

Read the entire column at NCPA's Health Policy Blog.

Expanding Medicaid Will Not Grow the Economy or Create Jobs

Hospitals, especially, but Obamacare supporters generally, have been championing the idea that Medicaid expansion creates jobs. Not true, according to new research by Robert Book of the American Action Forum.

Read the entire column at NCPA's Health Policy Blog.

Wait Times for Health Care in Canada Doubled Since 1993

This blog has discussed the evidence that Obamacare is reducing access to medical care. For those interested in the future of American health care, a look north of the border may be in order.

The Fraser Institute, an independent, non-profit Canadian research institute has published an annual report measuring data that the governments would prefer that the citizens ignore: How long it takes to get health care. It now takes over four months for Canadians to see a specialist after referral from a primary-care doctor.

Read the entire column at NCPA's Health Policy Blog.

Monday, December 15, 2014

How Can Digital Health Startups Work With Health Insurers and Big Pharma?

A previous article noted that risk capital is fleeing or stagnant in most of health care. The exception is digital health. StartUp Health, a New York investor in new healthcare ventures, reported that $5 billion was raised for new digital health businesses through the third quarter, versus $2.8 billion in all of 2013. 2014 Q3 alone saw $1.7 billion raised, versus $946 million in 2013 Q3.
Where is all this capital coming from? Since 2010, the three largest investors in digital health are Merck’s Global Health Innovation Fund, Blue Cross Blue Shield Venture Partners (founded by the Blue Cross Blue Shield Association) and Qualcomm Ventures. It is remarkable to see the venture arms of a leading research-based drug company, the largest association of health insurers, and the company that invented mobile technology all dominate this space.

Read the entire column at Forbes.

National Health Spending Slowdown Underwhelms; Obamacare Hurting Middle Class

The media got more than usually excited about the latest National Health Expenditures (NHE) produced by actuaries at the Centers for Medicare and Medicaid Services (CMS). Modern Healthcare reported that “healthcare spending growth hit 53-year low in 2013,” noting that last year’s 3.6 percent growth was the lowest since 1960.

While it is literally true that last year’s increase was the lowest since 1960, growth in 2009 was only 3.8 percent, after 4.8 percent in 2008. You do not need a PhD in economics to conclude that the recession was likely the largest factor. It is hard to detect much more than noise in the annual changes since the recession hit. This is corroborated by the fact that 17.4 percent of Gross Domestic Product is accounted by health care ― exactly the same percentage as in 2009 and every year since.

Read the entire column at NCPA's Health Policy Blog.

Saturday, December 6, 2014

Consumer-Driven Plans Continue To Grow

Consumer-driven health plans seized five more points of market share in the employer-based benefits market, according to Mercer’s latest report.

Read the entire column at NCPA's Health Policy Blog:

Drug Research And Its Discontents: Does It Really Cost $2.6 Billion To Develop a New Drug?

My previous column discussed the high cost of researching and developing a new pharmaceutical compound. I noted that the latest estimate, by the Tufts Center for the Study of Drug Development, is “controversial”, and promised to address the controversy. Well, here goes.

Read the entire column at Forbes.

Politicians Are Getting Goofy On Generic Drugs

Last month, I noted that prices for some generic drugs have been rising to great heights, inexplicably, and that politicians are trying to find out why. Well, even though we don’t quite know why, politicians are considering very harmful legislation to put a stop to it.

Read the entire aticle at NCPA's Health Policy Blog.

Thousands To Get Kicked Off Medicad, CHIP

Another unintended consequence of Obamacare:
The enrollees who are at greatest risk are pregnant women, children and blind and disabled individuals who were enrolled in Medicaid prior to the effective date of two Patient Protection and Affordable Care Act provisions — the 2014 expansion of coverage to all adults with incomes up to 138% of the federal poverty level, and the establishment of a new formula to define household income under the Modified Adjusted Gross Income (MAGI) standard. (Virgil Dickson, Modern Healthcare)
One of the greatest harms that Obamacare has inflicted is to have increased the fragmentation of access to health insurance. People in the part-time working class will be the worst affected: Churning between Medicaid and Obamacare exchanges, maybe twice a year or more, depending on changes in their incomes.

Read the entire column at NCPA's Health Policy Blog.

"Cadillac Tax" Will Hit 38 Percent of Employers In 2018

The “Cadillac tax” is the excise tax on high-value health plans, which goes into effect in 2018. If the value of health benefits exceeds $10,200 for an individual or $27,000 for a family, the excise will be taxed at 40 percent.

A new report from the American Health Policy Institute breaks down the effect on employers. As well as concluding that the Cadillac tax will hit 38 percent of employers in 2018, it estimates that the average employer-based policy will be subject to the tax by 2031.

Read the entire article at NCPA's Health Policy Blog

Thursday, December 4, 2014

Crisis In Pharmaceutical R&D: It Costs $2.6 Billion To Research And Develop A New Drug

The rate of growth of health spending remains moderate. But one area where prices appear to be increasing faster than they have in the past few years is brand-name prescription drugs. By 2012, blockbusters had lost their patents, and many looked forward to a future where we could all get a month-long supply of generic drugs for $4. Well, it did not quite work out that way.

Read the entire article at Forbes.

The Crisis in Pharmaceutical R&D

My interview with Newsmax on the cost of research and developing a new medicine.

Sunday, November 30, 2014

Health Technology Forum Meet Up in Washington, DC on December 11


I would like to invite you the Health Technology Forum Meet Up in Washington, DC, on December 11, from 6-9 p.m.

Our December 11 Meet Up will address the theme of Clinical Evidence in mHealth.

We have three speakers confirmed so far:

• Sandeep Pulim, MD, Chief Medical Information Officer of @Point of Care,  a new business incubated by StartUp Health which provides a streamlined practice-based tool to allow for the delivery of content at the clinician’s fingertips at the time it is acutely needed, built on IBM's Watson cognitive technology.

• Anand K. Iyer, Phd, MBA, Chief Data Science Officer of WellDoc, a healthcare company that uses technology to improve disease management outcomes and reduce health care costs. Dr. Iyer previously PRTM Management Consultants' Wireless Solutions practice where he helped companies in both the commercial and government sectors capitalize on the convergence of three mega trends: Internet ubiquity, emerging wireless technologies and innovative business models. He is a pioneer in the realm of Telematics and Telemedicine, where he has developed and launched several initiatives with OEMs to transition their basis of competition from a product-base to a service-base.

• Michael Slage of LiftOffHealth, the DC-area'a only incubator/accelerator focused exclusively on health care. LiftOffHealth will be welcoming its first class of entrepreneurs soon. If you have a new business idea you do't want to miss his presentation! Mr. Slage has over two decades of experience building new healthcare businesses.

More speakers will be announced soon. Your nominations are welcome.

To learn more, and RSVP, become a member of the Health Technology Forum: DC Meet Up, which takes only a few clicks of the mouse..

Saturday, November 29, 2014

Real Health Spending Continues Moderate Growth

The Bureau of Economic Analysis released its second estimate of 3rd quarter GDP and it confirms what was observed in the advanced estimate: Real growth in health spending is moderate.

Indeed, real GDP growth was revised upwards from 3.5 percent to 3.9 percent, but health spending was not really changed from the advanced estimate.

Read the entire column at NCPA's Health Policy Blog.

How the U.S. Single-Payer System For Seniors' Health Compares Internationally

The Commonwealth Fund has published another survey of health care across countries. The Commonwealth Fund’s widely reported surveys, while thorough, are frustrating because they invoke abstractions (for example “universal health insurance coverage“) to explain why the U.S. health system underperforms.

The latest survey should be able to get around this problem because it surveys only people aged 65 years and older in 11 developed countries. Because almost all American seniors are on Medicare — a single-payer, government-run program that is mostly funded by taxpayers — we might expect the Commonwealth Fund to find that the U.S performs about as well as other countries.

No such luck.

Read the entire column at NCPA's Health Policy Blog.

Premiums Hiked 10 Percent For Most Popular Obamacare Plans

Consultants at Avalere have confirmed that which I previously suggested: Obamacare plans that won market share in 2014 are hiking their premiums significantly. Although Avalere’s analysis does not diagnose why these plans are increasing premiums almost twice as much as premiums for group benefits, it is almost certainly because they experienced medical claims higher than they had anticipated.

Read the entire column at NCPA's Health Policy Blog.

On The Wrong Side of Wall Street?

It looks like I am zigging when the smart money is zagging. I’ve written that Obamacare will struggle to reach the Administration’s target of 9 million in 2015. At last week’s “Wall Street Comes to Washington” roundtable, sell-side analysts Carl McDonald of Citi and Ralph Giacobbe of Credit Suisse predicted that 2015 enrollment in Obamacare exchanges will reach 11 million.

Read the entire column at NCPA's Health Policy Blog.

Saturday, November 22, 2014

"Inexcusable": Administration Over-Counted Obamacare Sign-Ups By 380,000

The media seems to think that Obamacare’s second open enrollment is going just swimmingly. (How could it be going worse than last year’s?)

Unfortunately, the Administration still isn’t counting last year’s sign-ups accurately. Jonathan Cohn of The New Republic has called the Administration’s over-counting of Obamacare sign-Ups “inexcusable“. And that’s from one of Obamacare’s biggest fans.

What happened is that the Administration counted 400,000 dental-only plans as Obamacare plans.

Read the entire column at NCPA's Health Policy Blog.

Gilead Pays $125 For FDA Priority Review Voucher

Last May, we discussed Priority Review Vouchers, a type of intellectual-property right whereby the inventor of a drug for a rare disease, which is unlikely to be profitable because very few patients suffer from it, earns a marketable voucher that it can sell to another drug-maker that it can cash in at the FDA for a priority review of another new drug.

In the previous case, Knight Pharmaceuticals figured it could sell the voucher for $125 million to $300 million. Well, the market is now proven to function. Gilead Sciences has paid Knight $125 million for the voucher.

Read the entire column at NCPA's Health Policy Blog.

Right To Try Laws Now In 5 States

After this month’s elections, the number of states that have “right to try” laws for experimental drugs has hit five. One in ten states: Not bad for an effort run out of one think tank in Arizona.

Read the entire column at NCPA's Health Policy Blog.

Thursday, November 20, 2014

Post-Obamacare Reform: Will Insurers Be Redeemed?

Robert Pear of the New York Times recently described the “symbiotic” relationship between the Obama Administration and health insurers. It was not always so, but it is now "symbiotic".

This poses quite a challenge for health reform after Obamacare is repealed by the next President in January 2017. Will health insurers resist, focused on consolidating their Obamacare gains, or will they accept the need for real reform? Although not immediately apparent, there is hope that health insurers will be ready to move beyond Obamacare.

Read the entire column at Forbes.

Tuesday, November 18, 2014

Your Kaiser Permanente Doctor Will See You Now - At Target

You probably won’t find more criticism of large health systems on any other health policy blog than you will here. Nevertheless, we like innovation wherever we find it happening, and it is happening in some large health systems:

In a move that reflects the increasing wave of consumer-driven healthcare, Target Corporation is teaming up with Kaiser Permanente to open four in-store Target Clinics in Southern California, taking a host of services directly to thousands of customers.
The clinics opened at Target stores in Vista, San Diego and Fontana, and a fourth clinic will open in West Fullerton Dec. 6. They will be staffed by nurse practitioners from Kaiser.
Read the entire column at NCPA's Health Policy Blog.

Monday, November 17, 2014

The "Average" Obamacare Rate Hike May Be Much Lower Than Advertised - And That May Indicate More Adverse Selection

Now that we are on the third day of open enrollment, it may be time to puncture the balloon of “tame” Obamacare premium hikes. There has been a drumbeat of positive news about premiums in the Obamacare exchanges.

Good news? Well, not really. First, we have no idea what the “average” change in premium will be until after the dust settles on open enrollment next February 15. A simple average of rates announced prospectively does not tell us much until we see which plans Obamacare enrollees actually choose.

Read the entire column at NCPA's Health Policy Blog.

American Telemedicine Association Backs Telemedicine Compact

Our blog usually does not cheer the American Medical Association, because it is largely responsible for the Soviet-style centrally fixed prices that prevail in Medicare. Well, today we applaud the AMA for pledging its support to an important initiative that will increase the adoption of telehealth.

Read the entire column at NCPA's Health Policy Blog.

Saturday, November 15, 2014

Medicaid Spending Has Exploded

According to the Centers for Medicare & Medicaid Services (CMS), spending on Medicaid, the jointly funded state-federal welfare program that provides health benefits to low-income people, increased 6.7 percent in 2013 to $449.5 billion. And it will keep growing at a fast rate.

Read the entire column at The Daily Caller.

Friday, November 14, 2014

Health Insurance Without An Expiration Date

Hangsheng Liu and Soeren Mattke have written a useful short article at Health Affairs, promoting “health insurance without an expiration date,” criticizing the one-year term of most U.S. health insurance, which features open enrollment at the end of each calendar year.

Read the entire column at NCPA's Health Policy Blog

HSA-Eligible Plans Are Widely Available In Obamacare Exchanges

Paul Howard and Yevgeniy Feyman of the Manhattan Institute have conducted a thorough examination of plans available on Obamacare’s exchanges:
The report finds that, far from becoming obsolete under the ACA, high-deductible plans are widely available — 98 percent of uninsured Americans have access to at least one HSA-eligible plan. Moreover, these plans also make up about 25 percent of total offerings on Obamacare exchanges. We also found that they remain significantly less expensive than traditional plan designs, offering savings of about 14 percent, on average.
However, we must also recall that Obamacare exchanges encourage plans to compete by attracting the healthy and deterring the sick form applying for coverage. So, we should be careful about concluding that Obamacare’s HSA-eligible plans are really consumer-driven plans. Health insurers may be offering them as a method of selecting less expensive risks.

Read the entire column at NCPA's Health Policy Blog.

"Peak Obamacare" Will Exchanges End With A Bang Or A Whimper?

The U.S. Supreme Court has agreed to hear King v. Burwell, an important case about Obamacare’s subsidies (tax credits) to health insurers. Plaintiffs argue that in the 36 states with federal Obamacare exchanges, subsidies cannot be paid legally. If no subsidies can be paid, neither the individual mandate to buy health insurance nor the employer mandate to offer insurance can be enforced.

Few people would voluntarily buy health insurance from an Obamacare exchange if health insurers on the exchanges did not receive subsidies to enroll people. The premiums would be too high otherwise. Experts expect that the Supreme Court might decide on King v. Burwell in July, in which case Obamacare will end with a bang.

However, even if the Supreme Court allows the Administration to continue to unilaterally re-write the law, Obamacare’s exchanges – both state and federal – will likely end with a whimper in 2015 or soon after. Just look at how quickly the Administration began to roll back expectations for enrollment, immediately after the election.

Read the entire column at Forbes.

Tuesday, November 11, 2014

Hiring in Outpatient Clinics Froze Last Month

Hiring in health care continued its moderate pace in October. As noted in September, the rapid hiring in the health sector, especially in outpatient services, has slowed dramatically. Health care hired about 25,000 workers in October, increasing employment by 0.17 percent. Non-farm payrolls, excluding health care increased 0.15 percent. So, job growth in health care has settled down to a rate similar to the overall economy.

However, hospitals have picked up their hiring, adding 7,000 workers for growth of 0.13 percent, as shown in table 1. Hospital hiring had lagged other health hiring for months. Home health added a lot of employees, while nursing homes actually shed jobs. Outpatient clinics froze hiring in October.

Read the entire column at NCPA's Health Policy Blog.

Monday, November 10, 2014

Obamacare's Most Popular "Patient Protection" Is Why Patients Can't Get Paid For Saving The System Money

Last Monday, I posed the rhetorical question “Why Can’t Patients Get Paid for Saving the System Money?” and gave some examples, such as Medicare’s competitive bidding for durable medical equipment and incentives offered by Medicare Advantage plans, demonstrating how rules inhibit patients’ ability to participate more fully in forming prices and controlling costs.

The primary reason for such rules is to compensate for Obamacare’s most popular provision: Prohibition against medical underwriting, so that sick and healthy patients of the same age pay the same premiums.

Read the entire column at NCPA's Health Policy Blog.

Real Health Spending Remains Moderate, Inflation Increasing

For a while now, I’ve been surprised at how optimistic investors are about healthcare companies. Obamacare, the stock market tells us, is good for business. However, data on health spending does not support that story without qualification.

It looks like the discrepancy is between real versus nominal data. A survey reported in nominal dollars indicated a big hospital spending boom. On the other hand, the Gross Domestic Product (GDP) estimates indicate that real spending growth on health care is moderate.

Read the entire column at NCPA's Health Policy Blog.

Drug Patent Litigation is Robust

You may have heard the stories about brand-name drug-makers and generic competitors quietly doing deals called “pay for delay” with each other. “Pay for delay” consists of a brand-name drug-makers which has a drug coming off patent paying a generic competitor not to challenge the patent and enter the market.

It sounds pretty bad, although it may actually be an efficient way to resolve a patent dispute. In fact, generic drug makers are attacking patents more aggressively than they have in years, according to research by Lex Machina. They file faster and more often. As a result, the patented medicines being challenged are younger – only five years old, versus ten in 2010.

Read the entire column at NCPA's Health Policy Blog.

Say It Ain't So! The Medical Device Excise Tax Doesn't Hurt?

The medical-device excise tax, part of Obamacare, is a universally reviled 2.3 percent levy on medical devices. Many people think that it will finally be repealed, with Republicans in charge of both chambers.

Now, along comes the Congressional Research Service to pour cold water on the idea that the tax is a job killer. The writers agree that the tax makes no economic sense:
Viewed from the perspective of traditional economic and tax theory, however, the tax is challenging to justify. In general, tax policy is more efficient when differential excise taxes are not imposed. It is generally more efficient to raise revenue from a broad tax base. Therefore excise taxes are usually based on specific objectives such as discouraging undesirable activities (e.g., tobacco taxes) or funding closely related government spending (e.g., gasoline taxes to finance highway construction). These justifications do not apply, other than weakly, to the medical device case. The tax also imposes administrative and compliance costs that may be disproportionate to revenue.
However, they dispute the argument that it will harm device makers:
The estimates in this report suggest fairly minor effects, with output and employment in the industry falling by no more than two-tenths of 1%. This limited effect is due to the small tax rate, the exemption of approximately half of output, and the relatively insensitive demand for health services.
So, all is well? Not at all:

Read the entire column at NCPA's Health Policy Blog.

Corporate Digital Health Deals Are Exploding

A recent blog entry discussed a spate of reports, which demonstrated that investors are flooding into digital health, and less interested in traditional medical devices and pharmaceuticals.

A new report from CB Insights focuses on corporate investments in digital health, noting that “corporate investors from Google to Merck to BlueCross BlueShield are actively getting into the fray.”

This blog has started to discuss the emerging evidence base supporting digital health technologies, including telehealth. Despite Obamacare, many of these investments are likely to result in products and services that bend the curve of health spending.

Read the entire column at NCPA's Health Policy Blog.

Friday, November 7, 2014

Third Parties Control 83 Percent of Prescription Drug Spending, Up From 52 Percent in 1993

Adam J. Fein of Drug Channels has written a short article describing the evolution of payment for prescription drugs. In just twenty years, patients’ share of payments dropped from almost half of the spending to just 17 percent. Even worse, Fein forecasts, the share will drop to 12 percent by 2023.

Red the entire column at NCPA's Health Policy Blog.

83 Percent of Physician Practices Say Medicare's Quality Reporting Does Not Improve Quality

The Medical Group Management Association (MGMA) has produced another painful report about the experience of being a physician or physician executive:
More than 83% of physician practices stated they did not believe current Medicare physician quality reporting programs enhanced their physicians’ ability to provide high-quality patient care. In addition to the lack of effectiveness, physician practices reported significant challenges in complying with Medicare quality reporting requirements. More than 70% rated Medicare’s quality reporting requirements as “very” or “extremely” complex. In addition, a significant majority of respondents indicated these programs negatively affected practice efficiency, support staff time, and clinician morale.
Read the entire column at NCPA's Health Policy Blog.

Wednesday, November 5, 2014

Obamacare's Twilight: Health Reform In The Next Congress

Republican candidates won a decisive victory at the voting booth on Tuesday, in all races: House, Senate, governorships, and state legislatures. The future of Obamacare has never looked more bleak.

The next battle is more daunting: the Republican Party needs to avoid shooting itself in the foot, govern in a way that achieves results rather than perpetuates partisan bickering, and continue to develop patient-centered health reform for the post-Obamacare future. Although Obamacare itself will not be repealed until January 2017, Republican success yesterday gives depth, resilience, and energy to the post-Obamacare health reform movement.

Read the entire column at Forbes.

One Percent of Patients Account for 23 Percent of Health Spending

The Agency for Healthcare Research and Quality (AHRQ) has updated its estimate of the concentration of medical expenditures, previously reported as of 1996. In 2012:

  • Total medical spending was $1.35 trillion;
  • One percent of people accounted for 22.7 percent of total health expenditures, with an annual mean expenditure of $97,956;
  • Five percent of people accounted for 50.0 percent of the total, with an annual mean expenditure of $43,058; Ten percent of people accounted for 66.0 of the total, with a mean annual expenditure of $28,468;
  • Fifty percent of people accounted for 97.7 percent of the total; and Fifty percent of the people accounted for only 2.3 percent of the total.
Read the entire article at NCPA's Health Policy Blog.

Number of FDA's Regulatory Requirements Increased 15 Percent, 2000-2012

The Regulatory Affairs Professionals Society (RAPS), using data from our friends at the Mercatus Center, have concluded that the Food and Drug Administration’s regulatory requirements have increased 15 percent in just over a decade:
While regulatory professionals working with FDA needed to know just 16,329 requirements in 2000, they needed to know 18,777 in 2012, according to the data.
The analysis uses two measurements of regulatory burden: “Requirements”, defined as any instance in the U.S. Code of Federal Regulations containing the words “shall”, “must”, “may not”, “prohibited” or “required”; and the number of words in the regulations. Both grew at about the same rate.

Read the entire column at NCPA's Health Policy Blog.

Tuesday, November 4, 2014

John R. Graham: Shouldn't Healthcare Be Fair?

A new video from the Independent Institute.

Administration Continues to Stonewall on Obamacare Enrollment

Back in May, the U.S. Department of Health and Humans Services (HHS) suddenly stopped issuing monthly reports on enrollment in Obamacare’s exchanges. These reports had been used by the Administration to ramp up the cheer-leading to Obamacare’s “successful” recruiting of 8.1 million people by the end of the first open enrollment on March 31 (or, actually, sometime in mid-April due to omnipresent technical glitches).

On Halloween, HHS issued a report that looks exactly like the reports that it published through May 1. So, one might reasonably expect that if the Administration could produce a report on May 1 that announced enrollment as of March 31, the next report that it issued on October 31 could announce the numbers enrolled as of September 30.

No such luck.

Read the entire column at NCPA's Health Policy Blog.

Monday, November 3, 2014

Top Wall Street Analyst: Insurers' Bailout Assumptions "Make Us Nervous"

Citibank’s Carl McDonald, one of Wall Street’s top sell-side analysts covering health insurers, suspects that the firms which he covers are being too optimistic about the money they’ll receive from Obamacare’s risk corridors.

Read the entire column at NCPA's Health Policy Blog.

Why Can't Patients Get Paid for Saving the System Money?

Back in 2008, I met Michael Leavitt in his capacity as U.S. Secretary of Health and Human Services for President George W. Bush. Secretary Leavitt was trying to implement a new way for Medicare to buy some medical supplies, categorized as durable medical equipment (DME), through competitive bidding.

At the time, DME was bought using the same, Soviet-style fixed-fee schedules that Medicare uses for doctors and hospitals today. Competitive bidding for DME had actually been legislated in the Medicare Modernization Act of 2003. In 2014, we know that competitive bidding has saved hundreds of millions of dollars.

And yet, it took years for the Administration to overcome the suppliers’ lobby. Why? I suggest that it is because Medicare beneficiaries themselves did not share in the savings.

Read the entire column at NCPA's Health Policy Blog.

Saturday, November 1, 2014

Employer-Based Benefits: Spending Up 3.9 Percent

The Health Care Cost Institute, a collaboration of four major insurers, has published its 2013 Health Care Cost and Utilization Report and companion Out of Pocket Spending Trends 2013, which discusses cost trends for people with employer-sponsored insurance (ESI):
In 2013, health care spending for the national ESI population grew 3.9%. This growth rate was similar to the rates observed in 2011 (4.0%) and 2012 (3.7%). Spending growth for 2013 was driven mainly by rising prices rather than by utilization, as use of many services declined.
That is mixed news.

Read the entire column at NCPA's Health Policy Blog.

Medicare Part D Responsible for 60 Percent of Medicare Spending Slowdown

When Medicare added Part D, the prescription-drug benefit, via the Medicare Modernization Act (2003), its framers decided that every beneficiary would receive the benefit from a private plan, not from the government directly.

The benefits of this design continue to show themselves. In Health Affairs, Loren Adler and Alex Rosenberg conclude that the Part D benefit is responsible for 60 percent of the reduction in the rate of Medicare spending since 2011.

Read the entire column at NCPA's Health Policy Blog.

Government Buries Evidence of Poor Access to Care Under Obamacare

Thank providence for USA Today, which has given us yet another story describing how poor access to health care is under Obamacare.

People who fell for navigators’ sales pitches and signed up for Obamacare are discovering that it is junk insurance.

Read the entire column at NCPA's Health Policy Blog.

Obamacare Premiums Increased Dramatically For Every Age Group in 2014

HealthPocket, an online insurance broker, has measured the increase in premiums for every age group in Obamacare versus the pre-Obamacare individual market. Their conclusion: Premiums increased by double digits for every age group.

What I find really surprising is the increase in rates for 63-year olds: 37.5 percent for women and 22.7 percent for men. Recall that Obamacare forbids actuarially accurate underwriting by age.

Read the entire column at NCPA's Health Policy Blog.

Tuesday, October 28, 2014

Medicaid on the Oregon Trail

A few days ago, I wrote an article suggesting that an effective post-Obamacare reform would be difficult to bring about as long as anti-Obamacare reformers (especially yours truly) stuck to the simple argument that being on Medicaid is as bad (or even worse) than being uninsured. The reason is that the Medicaid beneficiary does not sign up for a national health plan called Medicaid. Instead, he is increasingly likely to sign up for a managed-care plan that contracts with the state to provide Medicaid benefits.

Readers retorted that the nail in Medicaid’s coffin was driven by the Oregon Medicaid experiment, a randomized, controlled trial (sometimes described as “gold standard” which it could not have been, because it was not double blinded). This blog has agreed that the Oregon Medicaid experiment demonstrated the ineffectiveness of Oregon’s Medicaid expansion. However, I am not sure that leads to a general theory of Medicaid’s overall ineffectiveness.

Read the entire column at NCPA's Health Policy Blog.

Monday, October 27, 2014

Obamacare Kills Jobs

Many health-policy analysts, lulled into complacency by the fact that employer-based health benefits have not vanished in a puff of smoke in Obamacare’s first year, insist that the federal healthcare takeover is not to blame for the continuing poor recovery in employment. Their arguments are superficially appealing, but they ignore the big picture.

Read the entire column in The Daily Caller.

Ed Gillespie's Health Reform Plan A Big Step In The Right Direction

Ed Gillespie, the Republican candidate for the U.S. Senate from Virginia has proposed a substantive plan to reform U.S. health care. The Washington Post called it “the most sensible GOP alternative.” An economic consulting firm estimates the plan, which was developed by the 2017 Project, would reduce the federal deficit by $1.3 trillion over 10 years.

There is significant overlap between the 2017 Project’s proposal and the NCPA’s: They both rely on individual tax credits for individually-purchased insurance as a building block for a new, consumer-driven health system.

Read the entire column at NCPA's Health Reform Blog.

Friday, October 24, 2014

Industry's User Fees Fail To Improve FDA's Approvals of Medical Devices

In June 2012, I wrote an analysis of the effect of user fees, paid by the medical-device industry, on the Food and Drug Administration’s behavior with respect to approving new medical devices. My conclusion: The FDA had sucked up the dollars without increasing its productivity.

New research, commissioned by the California Healthcare Institute, a trade association, confirms that the industry’s user fees are disappearing into a black hole. Despite putting a positive spin on the behavior of the regulator, which has a choke-hold on the industry’s ability to launch new products, the evidence indicates that the millions of dollars that the industry has paid to the FDA have not improved its performance.

Read the entire column at NCPA's Health Policy Blog.

Thursday, October 23, 2014

Naturalized Citizens Are Second-Class Citizens Under Obamacare

I suppose many will typify this as just another Obamacare glitch, but Obamacare exchanges will treat naturalized citizens as second-class citizens for 2015 open enrollment.

Read the entire column at NCPA's Health Policy Blog.

Wednesday, October 22, 2014

92 Percent of Nurses Dissatisfied With Electronic Health Records

Although we have frequently discussed physicians’ dissatisfaction with electronic health records, doctors are not the only victims of the federal government’s $30 billion adventure in underwriting poor IT investments. Nurses are even more disappointed in EHRs than doctors are, according to a new survey by Black Book Market Research.

Read the entire column at NCPA's Health Policy Blog.

Free of Obamacare Taxes, The Future of Health Care Is Digital

A handful of recent reports indicate that capital, overall, is seeking to exit the healthcare industries burdened by Obamacare’s excise taxes and annual fees. With one outstanding exception – digital health – much of health care is seeing consolidation through mergers and acquisitions. As for fresh capital, venture funding remains shriveled from its 2007 high.

Read the entire column at Forbes.

Monday, October 20, 2014

Is Medicaid-Associated Overuse of Emergency Departments Just A Temporary Surge?

Research from the UCLA Center for Health Policy Research suggests that increasing Medicaid dependency does not result in a secular increase in use of hospitals’ emergency departments (EDs). Rather, the jump in ED use is just pent-up demand being satisfied, which then drops off.

Sure, the people who sign up for Medicaid will consume a lot of medical care and then drop off. But they will also drop out of Medicaid until they need it again. Meanwhile, eligible people who become sick will sign up next month. It never stops.

And it certainly does not address the problem that Medicaid provides poor access to physicians. If it did, the newly covered would not have had to flood hospitals’ emergency departments.

Read the entire article at NCPA's Health Policy Blog.

Australia Will Raise $5 Billion By Privatizing Its Biggest Health Insurer

Australia’s federal government is about to raise almost $5 billion by privatizing its largest health insurer:

Australia has been shrinking the role of government in health care. Although a national single-payer scheme was established in 1975, the federal government re-introduced private choice within a few years. Indeed, Medibank Private is the descendant of the original single-payer plan, Medibank.

Read the entire article at NCPA's Health Policy Blog

Health Spending Grew 18 Percent Faster Than GDP In 12 Months

According to the Altarum Institute, health spending rose 4.9 percent in the twelve months through August 2014. In the twelve months to July, it rose 5.1 percent, 18 percent more than the 4.3 percent growth in Gross Domestic Product (GDP).

Read the entire article at NCPA's Health Policy Blog.

Price Transparency: Organizations to Watch

George Washington University’s Master of Public Health program has complied a nice list of fourteen “organizations to watch” because they are moving the ball on price transparency. The woman who wrote the article, Emily Newhook, sent an email to NCPA bringing it to our attention.

Unfortunately, we can hardly ever make time and space to profile lists compiled by other parties, but I decided to give this one a boost for a number of reasons.

Read the entire article at NCPA's Health Policy Blog.

Thursday, October 16, 2014

Mars and Venus on Medicaid

Avalere Health estimates that 75 percent of Medicaid dependents will be enrolled in MCOs by 2015, up from 63 percent in 2012. The Kaiser Family Foundation anticipates that a “sharpened focus on high-cost/high-need beneficiaries” will lead states to enroll more of the sickest Medicaid dependents into private plans.

If done properly, this should improve outcomes for those patients. Medicaid managed care blurs the line between the Medicaid “ghetto” and private choice. When the opportunity for post-Obamacare health reform arises, Medicaid managed care's success will make patient-centered reforms to the whole system easier to bring about.

Read the entire column at Forbes.

Wednesday, October 15, 2014

The Case For Drugstore Clinics

In The Atlantic, Richard Gunderman, MD, PhD, has delivered “The Case Against Drugstore Clinics“. It is a weak case.

Read the entire column at NCPA's Health Policy Blog.

After Almost One Year, Some Medicaid Applicants Still Not Enrolled

Well, there is progress. In June, we discussed the three million people who were funneled into Medicaid by Obamacare’s exchanges, but had still not been enrolled. As of October, the backlog is down to a few hundred thousand.

Read the entire column at NCPA's Health Policy Blog.

A Business Group Reacts Strangely To The Rise Of Private Health Exchanges

This blog has discussed the rise of private exchanges for health benefits, describing them as “getting ready for individual health insurance to be the standard.” A private exchange allows an employer to make a defined contribution to employees’ health benefits, which they can use to choose one of many policies within the exchange.

The strangest news is the reaction of the National Business Coalition on Health to its own survey of employers:

In a departure from other industry polls, employers said they plan to reject private exchanges as a way to control rising health care costs, according to a new survey of more than 330 employers…

In fact, the survey reports that 32 percent are considering moving to one within three to five years, up from 5 percent today. Describing growth of over 600 percent as a “plan to reject” is surely inaccurate.

Read the entire column at NCPA's Health Policy Blog.

Monday, October 13, 2014

Adverse Selection Got Worse As Obamacare's Open Enrollment Progressed

New data from Express Scripts, a leading pharmacy-benefits manager (PBM) indicates that adverse selection in Obamacare exchanges actually got worse as open enrollment reached its hard finish in mid-April.

However, the later sign-ups look to be in much worse shape with respect to very expensive conditions that are not so widespread:

Exchange enrollees fill 59% more prescriptions for specialty medications than other insured individuals. This disparity is especially pronounced in Exchange enrollees ages 18 to 34, who fill twice as many specialty medications as similarly aged individuals in traditional health plans.
Nearly 3 out of 5 specialty prescriptions filled by Exchange members are for HIV medication.

The younger adults are even sicker, versus their peers, than the middle-aged ones.

Read the entire column at NCPA's Health Policy Blog.

Ironies Abound: Walmart Workers Who Lose Their Benefits Can Buy Obamacare Policies At Walmart!

Walmart stands out as the poster child of Obamacare’s perverse consequences. Last week, the giant retailer announced that it is dropping benefits for workers who put in fewer than thirty hours per week, which is the definition of part-time according to Obamacare. This will affect about 30,000 U.S. workers. For the remaining “associates” still eligible for benefits, their premiums will jump 19 percent, from $18.40 to $21.90 per pay period. Project 2017′s Jeff Anderson has dug up an embarrassing letter published by Walmart in 2009, which championed Obamacare:

Read the entire column at NCPA's Health Policy Blog.

Friday, October 10, 2014

5 Myths About Cancer Care

Leading health economists Dana P. Goldman and Tomas Philipson challenge five myths about cancer care. To the right we have an infographic that explains them very clearly.

The most economically interesting one is the fourth. This appears to challenge the notion that we should be skeptical about paying high prices for therapies that might buy only a short time of good life. (In health-economics, we use terms like Quality-Adjusted Life Year [QALY] and Disability-Adjusted Life Expectancy [DALE].)

Read the entire column at NCPA's Health Policy Blog.

Hospital Administrative Costs Higher In U.S. Than Other Countries

The Commonwealth Fund has sponsored yet another study that concludes that the U.S. health system is less efficient than others. This time, the measurement is specifically hospitals’ administrative costs. As always, it recommends single-payer, government monopoly as the solution.

Readers of this blog know that I am not about to defend hospitals’ bloated administrative costs. However, the Commonwealth Fund’s scholars go way off-base when it comes to capital costs.

Read the entire column at NCPA's Health Policy Blog.

Lawmakers Should Ask The FDA, Not Manufacturers, Why Generic Drug Prices Are Skyrocketing

U.S. Representative Elijah Cummings and U.S. Senator Bernie Sanders have asked 14 manufacturers of generic drugs why prices for some of their products have multiplied hundreds or thousands of times in the last few years:

  • Albuterol Sulfate, used to treat asthma and other lung conditions, increased 4,014% for a bottle of 100 2 mg tablets.
  • Doxycycline Hyclate, an antibiotic used to treat a variety of infections, increased 8,281% for a bottle of 500 100 mg tablets.
  • Glycopyrrolate, used to prevent irregular heartbeats during surgery, increased 2,728% for a box of 10 0.2 mg/mL, 20 mL vials.

It’s a fair question, but it does not look like the line of inquiry is on the right track

Read the entire column at NCPA's Health Policy Blog.

Thursday, October 9, 2014

Obamacare's War On Women Reduces Employment By 4 Million Equivalent Full-Time Workers

Casey Mulligan of the University of Chicago has just released a study examining Obamacare’s impact on employment. Mulligan has also written a damning op-ed explaining how Obamacare discriminates against women workers.

Read the entire column at NCPA's Health Policy Blog.

Hospitals Profit From Drug Discount Program For Poor Americans

A new study by Drs. Rena M. Conti and Peter B. Bach makes a valuable contribution to the growing body of evidence on the harm being done by a federal program that Congress designed to increase poor people’s access to prescription drugs, but has been perverted by hospitals to pad their bottom line.

Read the entire column at Forbes.

California's Prop 45 Support Dropping For Good Reason

Proposition 45, a ballot initiative that would give California's Insurance Commissioner, Dave Jones, power to determine insurance rates for millions of Californians, looked like a winner last summer. A Field poll conducted in June and July showed 69 percent in favor versus only 16 percent opposed. However, in August and September, the numbers dropped to 41 percent to 26 percent in the Field poll, and 48 percent to 38 percent according to the Public Policy Institute of California.

As more voters tune in, they realize that giving more power to politicians to determine health-insurance premiums is a losing proposition.

Read the entire article in the Orange Country Register.

Administration Plans To Make Insurer "Bailout" Payments Illegally

Informed observers believe that the U.S. Department of Health & Human Services (HHS) will make “bailout” payments to health insurers under Obamacare’s risk-corridor program, despite a growing body of legal opinion that such payments would be illegal. As previously discussed at this blog, both the Government Accountability Office and the Congressional Research Service have held that the Administration needs Congress to appropriate funds in order to make risk-corridor payments.

This is an issue on which NCPA has exerted significant influence. I testified to the House Committee on Oversight and Government Reform on June 18, and NCPA has published that testimony as an Issue Brief.

Read the entire column at NCPA's Health Policy Blog.

"Open Payments" Website Missing $1 Billion

Just yesterday, we discussed the federal government’s intrusive and mischievous Open Payments website, where payments for consulting and similar services provided by doctors to pharmaceutical and medical-device makers are publicized.

Well, less than a week after launching the database, the federal government has disclosed more errors, adding up to about $1 billion:

Read the entire column at NCPA's Health Policy Blog.

Tuesday, October 7, 2014

Federal IT Standards Pushed Back Yet Again

Sometimes deadlines just slip. The federal government’s deadline for providers certifying “Meaningful Use Stage 2″ in order to get federal funding for their electronic health records (EHRs) has just been bumped yet again.

Read the entire column at NCPA's Health Policy Blog.

Where Are The "Open Payments" From Government?

Well, now we know how much pharmaceutical companies and medical-device makers pay doctors for consulting and similar services. Paul Keckley aptly summarizes last week’s data dump from the Centers for Medicare & Medicare Services (CMS).

Read the entire article at NCPA's Health Policy Blog.

Half of Doctors Give Obamacare D or F

The Physicians Foundation and Merritt Hawkins (a physician recruiting firm) have just published their biennial physicians’ survey. The survey interviews over twenty thousand physicians in all fifty states and multiple specialties.

Read the entire column at NCPA's Health Policy Blog.

Medicare Advantage: Telemonitoring Cuts Admissions 44 Percent; ROI $3.30 per dollar

Geisinger Health Plan has conducted a study of elderly patients enrolled in Medicare Advantage who were treated for congestive health failure.

The key policy take-away is that these patients were members of Geisinger’s Medicare Advantage plan, which frees both patients and providers from Medicare’s bizarre, Soviet-style, price-fixing schedules. It would be very challenging to execute this innovation in the traditional Medicare program, because only very few types of facilities can claim reimbursement for telehealth.

Read the entire column at NCPA's Health Policy Blog.

Hiring In Health Care Finally Slows Down

Fast-paced hiring in health care, which I previously discussed with respect to the jobs report for August, seems to have tempered in September. The case I’ve been making over the last few months is that healthcare providers have been adding workers faster than the rest of the economy. In September, that turned.

Read the entire column at NCPA's Health Policy Blog.

Reporting Changes In Uninsured Due To Obamacare: Government Agencies Can Be Clearer

One of the themes of this blog is that the number of uninsured Americans is not decreasing as quickly or surely as Obamacare’s supporters would have us believe. Part of the problem estimating this is a confusing series of releases from federal agencies, which has led to inconsistent interpretation by scholars.

Last month, the Centers for Disease Control and Prevention (CDC) released the results of the National Health Insurance Survey (NHIS), which I discussed under the headline “Number of Uninsured Americans Aged 18-64 Down 2 Percentage Points.” What this was referring to was that the percentage of residents in that age group who were uninsured at the time of the interview had dropped from 20.4 percent in 2013 to 18.4 percent in the first quarter of 2014. That’s about 3.8 million people.

However, the proportion who were uninsured for at least part of the last year barely budged from 24.4 percent to 24.3 percent, and the proportion who were uninsured for more than a year dropped by 1.7 percentage points, from 15.7 percent to 14 percent. That’s about 3.2 million people. Obviously, the last group is a subset of the second group. The first group is also a subset of the second group, but it is not clear how to connect the first group and the third group.

It's a big difference, with big policy implications:

Read the entire column at NCPA's Health Policy Blog.

Friday, October 3, 2014

Obamacare Veteran Sues Obamacare To Disclose Premiums

Here’s one from the “you can’t make this up” files:
The Department of Health and Human Services is in the spotlight for claims it is violating the Affordable Care Act.
The lawsuit was filed by Mehri & Skalet attorney Jay Angoff, who used to oversee ACA implementation for HHS. Filed on behalf of a Missouri consumer advocacy group, the suit claims the federal agency is not following through on its obligation to make rate filings for 2015 publicly available in time for the public to comment on them.
Get it? Mr Angoff “used to oversee ACA implementation for HHS.” He used to run Obamacare. Now, he’s running against it. Here’s why;

Read the entire column at NCPA's Health Policy Blog or the Independent Institute's Beacon blog.

Veterans Wait 3 Months For Primary-Care Appointment Vs. 3 Days For Private Patients

I have noted with dismay that the U.S. government is trying to fix the Veterans Health Administration scandal over wait times by throwing more money at a fundamentally broken system.

Jonathan Bush, CEO of athenaHealth, a leading provider of cloud-base electronic health records (EHR’s) has researched his firm’s database to arrive at a shocking conclusion: Patients wait three days, on average, for a primary-care appointment. And that was for well patients: Sick patients got in in one day.

Read the entire column at NCPA's Health Policy Blog.

States' Right-To Try Laws Have A "Strange" Allure

Writing in JAMA: Journal of the American Medical Association, Patricia J. Zettler, JD, and Henry T. Greely, JD, both of Stanford University, criticize the “strange allure” of states’ laws that recognize patients’ “right to try” new medicines before the Food and Drug Administration (FDA) approves them.

These laws should help patients get access to medicines that the FDA forbids. However, these lawyers point out that the FDA’s power may overwhelm these laws.

Read the entire column at NCPA's Health Policy Blog.

Medicare Advantage: Mend It; Don't End It

Medicare Advantage is one area of U.S. healthcare policy that’s not a complete disaster. It’s not surprising that the Obama administration revealed in September that enrollment in the program is at an all-time high.

Medicare Advantage enables older Americans to choose a health plan from an array of private insurers. If not for this option, nearly 16 million people would be stuck in the traditional Medicare Part A (physician) and Part B (hospital) plans, where the federal government determines how much to pay providers according to bureaucratic formulae.

It needs to be reformed, but not replace.

Read the entire column at The Daily Caller.

Thursday, October 2, 2014

U.S. Infant Mortality Still Lags Other Developed Countries

There’s more bad news for the U.S. on the infant mortality front: The U.S. ranks last of 26 countries in infant mortality: 6.1 per 1,000 live births, versus 2.5 in Sweden, according to a new study by the Centers for Disease Control and Prevention (CDC).

Regrettably, other evidence points to large racial disparities in the U.S., with black babies doing especially poorly. Nevertheless, even if we exclude black babies, white, Hispanic, and Asian U.S. babies appear to do worse than in other countries.

Read the entire article at NCPA's Health Policy Blog.

Are Insurers Bailing In To Obamacare?

Obamacare’s supporters cheered a report by the U.S. Department of Health & Human Services, which claimed, based on preliminary evidence, that more insurers will participate in Obamacare exchanges next year:

This is evidence, according to the media, that Obamacare is here to stay. There is no doubt that insurers are heavily invested in the success of Obamacare. They certainly want the subsidies that flow as tax credits via the exchanges.

Nevertheless, I don’t think that means that Obamacare is a done deal, for at least three reasons.

Read the entire column at NCPA's Health Policy Blog.

Wednesday, October 1, 2014

GAO Says Congress Can Stop Obamacare's Bailout of Health Insurers

Yesterday, the General Counsel of the U.S. Government Accountability Office (GAO) supported the requirement that the Administration needs appropriations to bail out insurers who lose money in Obamacare exchanges in 2015, via risk corridors:

HHS stated that it intends to begin collections and payments under section 1342 in FY 2015. However, as discussed above, for funds to be available for this purpose in FY 2015, the CMS PM appropriation for FY 2015 must include language similar to the language included in the CMS PM appropriation for FY 2014.

This is a very positive development towards protecting taxpayers’ from the unlimited liability to which Obamacare exposes us by protecting insurers’ income statements from losses in Obamacare exchanges.

Read the entire column at NCPA's Health Policy Blog.

60 Percent of Commercial In-Network Payments Are "Value-Oriented". Does It Matter?

The Catalyst for Payment Reform has released this year’s Scorecard for Payment Reform, which reports a dramatic increase in employer-based provider contracts that are “value-oriented”. “The 2014 Scorecard shows a 29 percentage point increase over 2013, when just 11 percent of payments were value-oriented.” However, the details seem to deflate the potential for this transformation.

Read the entire column at NCPA's Health Policy Blog.

Tuesday, September 30, 2014

Kaiser Permanente's Former Chairman Might Not Understand Why Healthcare Prices Are Different

Consumer Reports has published an article demanding that we get "mad about the outrageous cost of health care." Hey, I'm all for that. The article goes through the usual list of suspects, e.g. $37.50 for a single Tylenol, having two or three MRI scans when one will do, et cetera. The article also asserts that "health care works nothing like other market transactions. As a consumer, you are a bystander to the real action..." I could not agree more.

However, I was a taken aback by a statement from George Halvorson, the former Chairman of Kaiser Permanente: "There is no such thing as a legitimate price for anything in health care. Prices are made up depending on who the payer is." That is not unique to health care. It is a characteristic of almost all markets.

Read the entire column at Forbes.

Obamacare Not Yet One Year Old, Providers Prepare to Lobby for More Money

Now that Obamacare is rounding out its first year, and seems to be secure for the time being, providers who advocated for it are starting to change their lobbying tune. When Obamacare was less secure, the story was that it would improve the situation dramatically — for everyone.

Unfortunately, providers are already starting to complain that it’s not enough; they need more money.

Read the entire article at NCPA's Health Policy Blog.

Obamacare Might Have Enrolled Only 2.3 Million; Spent $73 Billion to Save $5.7 Billion in Uncompensated Care

Things change fast in Obamacare. Just yesterday, I discussed evidence that Obamacare had enrolled only 6 million people in subsidized, private plans on exchanges. Having read the U.S. Department of Health & Human Services’ (HHS’) latest report, it looks like the figure is only 2.3 million: “Based on an estimated 10.3 million decrease in the total number of uninsured and an estimated 8 million increase in the number covered by Medicaid, ASPE estimates that hospital uncompensated care costs will be $5.7 billion lower in 2014 than they otherwise would have been.” The difference between 10.3 million and 8 million is only 2.3 million, and that is quite a comedown from HHS’ May estimate that 8.1 million people “selected” private coverage in exchanges.

Read the entire column at NCPA's Health Policy Blog or the Independent Institute's Beacon blog.

Is The FDA Even Capable of Regulating 21st Century Medical Devices?

he pace of innovation in medical devices is breathtaking. The most exciting developments are in mobile health. One year ago this month, the Food and Drug Administration (FDA) issued its final regulations on mobile medical apps. So far this year, the FDA has approved 23 medical apps that the editors of MobileHealthNews define as “notable.”

The role of the FDA in preventing such apps from reaching patients is of great concern. Mobile technology is so well integrated with other technologies that we now take for granted that FDA regulation of these apps risks giving the FDA power over tools that we’ve used conveniently for years. Many were relieved when the South Korean FDA announced in March that it would not regulate Samsung’s latest Galaxy smartphone!

Well, the whole issue may become irrelevant. Ordinary citizens are hacking medical devices to improve them, ignoring the FDA completely.

Read the entire column at NCPA's Health Policy Blog.

Obamacare Might Have Enrolled Only 6 Million (Not 8.1 Million)

I’ve been discussing evidence that Obamacare enrollment has been shrinking, and that the number of uninsured might have increased in 2014. Now, there’s more.

Read the entire article at NCPA's Health Policy Blog.

60 Percent of Health Plans That Could Meet Obamacare's Essential Heath Benefits Are Illegal

According to Obamacare’s regulations, a health plan must pay at least 60 percent of the actuarial value (AV) of its costs. That means that if the cost of your health care for a year is expected to be $8,000, a plan which pays 60 percent (called a bronze plan in Obamacare), will cover $4,800 of the costs. You’ll be expected to pay $3,200 in deductibles and co-payments.

Our colleague Linda Gorman defines AV as “the average amount a plan with a given set of benefits is likely to pay given a standard population.” I’ve also discussed that because Obamacare’s regulations define AV relative to a “standard population” health insurers can design plans that cause the sick to have extremely high out-of-pocket costs.

Professor Bob Graboyes, in the compelling and entertaining video presented below, explains another big problem with Obamacare’s AV regulations: They outlaw 40 percent of possible AVs above the 60 percent minimum.

Read the entire column at NCPA's Health Policy Blog.

Research Suggests Los Angeles Has No Cardiologists in Obamacare Networks, Chicago No Diagnostic Radiologists

The American Heart Association commissioned Avalere Health to examine the adequacy of provider networks in health plans on Obamacare exchanges. “Narrow networks” have been in the news, as patients have learned that their Obamacare plans do not cover their preferred physicians. This new research covered nine urban areas, and confirms that patients are right to be concerned.

Read the entire article at NCPA's Health Policy Blog.

Federally Funded Rate Review Saved One Percent of Premium - At Most

The U.S. Department of Health & Human Services (HHS) has produced a report cheerleading the results, so far, of the $250 million it is giving to states to impose “rate review”. The results are underwhelming: $703 million dollars cut from $110.5 billion of premiums last year. Because it comes from a self-congratulatory press release, this reduction of less than one percent of premium must be the best estimate they could get, after strangling the data until it confessed to something.

Read the entire article at NCPA's Health Policy Blog.

Hospitals Admit: Medicaid Expansion Increases ED Use

The evidence that Medicaid expansion increases use of hospitals’ emergency departments is coming fast and thick. Hospital executives are longer afraid to admit it, and have given up the pretense that Medicaid increases timely, quality, primary care.

Read the entire article at NCPA's Health Policy Blog or the Independent Institute's Beacon blog.

Are There 1.3 Million More Uninsured in 2014?

Kudos to Joe Antos of the American Enterprise Institute for discovering a datum that the government neglected to promote: By one of the government’s own measurements, the number of uninsured Americans increased by 1.3 million during February through April 2014 versus the same three months of 2013.

Read the entire article at NCPA's Health Policy Blog.

The Return of "Death Panels" Government-Funded End-of-Life Planning is Morally Questionable

Are death panels on the rebound? Obamacare envisioned Medicare paying physicians to discuss end-of-live-care with their patients. When this sparked fierce blowback from citizens who feared that “death panels” would ration care to elderly patients, the Administration backed off.

However, the American Medical Association (AMA) has been lobbying for the execution (pun intended) of this provision. The AMA is a business which profits from its monopoly over the billing codes that physicians use when they submit claims to Medicare. The more billing codes there are, the better it is for the AMA.

For patients, however, it is risky to allow the government to pay physicians to counsel us on end-of-life issues. There is another approach, but it is so emotionally challenging that it may be impossible to implement.

Read the entire article at Forbes.

Thursday, September 25, 2014

3 of 4 Physicians Say Government-Sponsored EHR's Not Worth The Cost

Mitch Morris, MD, of the Deloitte Center for Health Solutions discusses the results of the firm’s latest survey of U.S. physicians:

Three out of four physicians surveyed report that EHRs increase costs and do not save them time. This survey is not alone in its findings: Through another recently released survey, Clem McDonald and colleagues found that physicians say that EHRs “waste an average of 48 minutes per day.”
Read the entire column at NCPA's Health Policy Blog.

Did the War on Poverty Stop the Drop in Poverty?

Robert Rector and Rachel Sheffield of the Heritage Foundation have written an analysis of fifty years of the War on Poverty. The result: It looks like the number of poor people was falling dramatically in the years before President Johnson declared War on Poverty; and that the drop stalled soon after.

Read the entire column at NCPA's Health Policy Blog.

Hospitals Respond to Obamacare's Perverse Incentives: ED Use Up, Charity Care Cut

Hospitals, inveterate lobbyists for Obamacare, have responded rationally to its incentives: They have increased use of their emergency departments, and cut charity care.

Read the entire column at NCPA's Health Policy Blog and the Independent Institute's Beacon blog.

We're Number 44! Bloomberg Ranks Countries on Efficient Health Care

Bloomberg (the media business, not the former mayor of New York, although the latter appears to have regained control of the former), has ranked 51 high- and middle-income countries on healthcare efficiency. The U.S ranks 44th.

44 of 51 is pretty bad. (Indeed, we are bracketed by the Dominican Republican and Bulgaria). However, the Bloomberg rankings suffer from some of the same problems that we see with other rankings.

Read the entire column at NCPA's Health Policy Blog.

32 Percent of Employers May Move to Health Exchanges in 3 Years

PricwaterhouseCoopers has released new results from its 2014 Touchstone survey of employers. The major take-away is that one third of employers are considering moving their active employers to private health insurance exchanges in the next three years.

I have been excited about private exchanges for a while now. Private exchanges are a way for us to solve a problem that we’ve been beating our heads against for years: Employers’ monopoly control of our health dollars is the “original sin” of U.S. health care. Nevertheless, it is so deeply embedded in our culture and business practices that anyone who threatens it by advocating individual choice in health benefits faces fierce blowback.

Read the entire column at NCPA's Health Policy Blog.

Medicaid Spending Will Be More Than Advertised

According to the Centers for Medicare & Medicaid Services, spending on Medicaid, the jointly funded state-federal welfare program that provides health benefits to low-income people, increased 6.7 percent in 2013 to $449.5 billion. And it will keep growing at a fast rate.

Read the entire column at NCPA's Health Policy Blog.

Obamacare Will Devour Your Pay Raise

Mercer’s latest National Survey of Employer Sponsored Health Plans reports that the cost of employer-based benefits will jump significantly in 2015

Employers in the U.S. are predicting that health benefit cost per employee will rise by 3.9 percent on average in 2015, preliminary results from a new survey by Mercer reveal. Cost growth slowed to 2.1 percent in 2013, a 15-year low, but appears to be edging back up. Moreover, a higher percentage of employees signing up for coverage through the worksite could be a wildcard driving costs higher.

Read the entire column at NCPA's Health Policy Blog or the Independent Institute's Beacon blog.

Commonwealth Fund: Most Who Visited Obamacare Exchanges Rated Them Fair or Poor

The media have cheered the latest Commonwealth Fund survey of Americans who have tried to enroll in Obamacare plans on health-insurance exchanges. For those who actually read the report, the results are significantly worse for Obamacare than championed by the press release.

Read the entire column at NCPA's Health Policy Blog.

Dartmouth Debunked? Providers Don't Drive Variation in Health Spending

Central planners love to cite the Dartmouth Atlas of Health Care. The Atlas is an impressive, decades-long effort to study geographic variance in health spending. The famous Atul Gawande, MD, is likely responsible for the fact that the Dartmouth results are better known among lay people than any other research in health economics.

Our Greg Scandlen has previously discussed research that challenges the Dartmouth conclusions. Now, Louise Sheiner of the Brookings Institution has published research that further challenges the Dartmouth results.

Read the entire column at NCPA's Health Policy Blog.

Wednesday, September 24, 2014

The Return of Death Panels? Government-Funded End-of-Life Care is Morally Questionable

Are death panels on the rebound? Obamacare envisioned Medicare paying physicians to discuss end-of-live-care with their patients. When this sparked fierce blowback from citizens who feared that “death panels” would ration care to elderly patients, the Administration backed off.

End-of-life planning is back on the radar screen because of a very thorough report just released by the Institute of Medicine (IoM). It comprises a wealth of information on the state of end-of-life planning in America today. Unfortunately, it contains a dangerous recommendation: Government-funded counselling.

Read the entire column at Forbes.

Tuesday, September 23, 2014

Obamacare is Reducing Economic Growth, Not Growth in Health Spending

One major criticism of U.S. health care is that we spend more money on health care than any other country. If health spending consumes resources that are needed elsewhere, this could be a problem. The U.S. now spends about 17 percent of its Gross Domestic Product (GDP) on health care. Canada, where government has a monopoly on essential health services, keeps spending down to about 10 percent of GDP. The conclusion, apparently, is that more government reduces health spending.

This is Obamacare’s governing principle. On the face of it, it seems to be working: The rate of growth of health spending is flat. Indeed, it may remain around 17 percent of GDP this year, and for even a few more years.

However, there is no evidence that Obamacare’s increased regulation of health care is causing this moderation.

Read the entire column at the Intellectual Conservative.

Thursday, September 18, 2014

A Very Weak Argument In Favor Of Hospital Mergers

Earlier this week, I discussed the rapid pace of mergers throughout health care. Hospital consolidation is one point of special concern, because it can reduce competition and increase prices.

In the Wall Street Journal, Dr. Kenneth L. Davis, MD, CEO and President of Mount Sinai Health System in New York City puts forward a number of claims in favor of hospital consolidation. Each is weak, making an unconvincing argument overall.

Read the entire column at NCPA's Health Policy Blog.

Number of Uninsured Americans Aged 18-64 Down Two Percentage Points

The number of uninsured Americans, aged 18-64 has dropped by two percentage points from the first quarter of 2013 to the first quarter of this year, according the Centers for Disease Control (CDC).

That brings the proportion of uninsured down to where it was about ten years ago. In other words, Obamacare has not managed to overcome the results of the recession that began in December 2007. Plus, much of the reduction in uninsured is a result of more people becoming dependent on Medicaid, which is welfare, so should not be viewed as the same type of benefit as individually owned or employer-based health insurance.

Read the entire column at NCPA's Health Policy Blog.

Obamacare's Second Open Enrollment Starts In Two Months - Ad It's Going to Be Awful

If there is one thing that the Administration and Democratic candidates have in their favor going into the mid-term elections, it is that election day is November 4, and Obamacare’s second open enrollment begins on November 15. If the dates were flipped, there is little doubt that voters affected by Obamacare would wreak havoc on the politicians who imposed the Rube Goldberg contraption of exchanges on them.

Despite having just tossed another $60 million out the window “to help consumers navigate their health care coverage options in the Health Insurance Marketplace,” the Administration will likely face an even more bemused and disgruntled population of "consumers" than it did the first time around.

Read the entire column at Forbes.

Tuesday, September 16, 2014

UnitedHealthcare's Price Transparency Tool Is Having An Impact

UnitedHealthcare has released a study describing the results of its myHealthcare Cost Estimator, and mobile version (Health4Me). The results are, perhaps, unusual. The report concludes that patients who used these tools chose higher quality providers. However, it did not report savings from using the tools. I also note that the report was finished on February 25, but only released to the public today.

Read the entire column at NCPA's Health Policy Blog.

Massive Momentum for Mega-Mergers in Health Care

Paul Keckley of Navigant Consulting summarizes the rapid pace of consolidation within U.S. health care. Keckley’s article has a business angle. He points out that a staple of business school case studies is failed mergers. Nevertheless, most mature industries (e.g. airlines, accounting firms) consolidate rapidly and thoroughly.

Health care has seen a wave of mergers before.

Read the entire column at NCPA's Health Policy Blog.

Individual Health Insurance Rates Rose 24.4 Percent in 2014

A new paper written by Professor Amanda Kowalski of Yale University, the National Bureau of Economic Research (NBER), and the Brookings Institution examines the effect of Obamacare on premiums in the individual market for health insurance in 2014 versus 2013. Her analysis includes policies sold in the individual market off the exchanges, as well as those sold on Obamacare exchanges:
Across all states, from before the reform to the first half of 2014, enrollment-weighted premiums in the individual health insurance market increased by 24.4% beyond what they would have had they simply followed state-level seasonally-adjusted trends.
Read the entire column at NCPA's Health Policy Blog.

Federal Health IT Standards Still Taking On Water

Last May, this blog discussed the proposed watering down of standards for hospitals and other facilities to get federal bounties for so-called “meaningful use” of electronic health records (EHRs) in 2014.

Well, they appear to have done it again.

Rad the entire column at NCPA's Health Policy Blog.

Why Do Large Employers Want To Control Their Employees Health Benefits?

There is no doubt that large employers want to offer health benefits to their employees. It does not seem to bother them that each employee is not free to spend his own money on health insurance that suits his and his family’s needs.

The effect of Obamacare on these benefits has yet to be determined. At one extreme, an analyst at S&P Capital IQ concluded earlier this year that 90 percent of employees working at companies in the S&P 500 stock index would lose their employer-based health benefits by 2020. These are the largest companies in the United States.

Nevertheless, these employers continue to commit themselves resolutely to employer-based benefits. Why?

Read the entire column at NCPA's Health Policy Blog.

Saturday, September 13, 2014

Employer Health Costs Rising Slowly? Some Many Not Be Offering Obamacare's Minimum Benefits

Yesterday, we discussed the slow rate of growth of premiums in employer-based plans. Today, Kaiser Health News reported a surprising discovery: Some employers who assert they are offering benefits may not be. Indeed, their plans may not even offer hospitalization benefits.

Read the entire column at NCPA's Health Policy Blog.

Being Observed In Hospital? Patients With Private Coverage Better Off Than Medicare Beneficiaries

This headline comes from that notorious member of the right-wing conspiracy, Kaiser Health News.

Read the entire column at NCPA's Health Policy Blog.

Friday, September 12, 2014

Employer-Based Health Insurance Costs Up 3 Percent, Share of Workers in Consumer-Driven Plans Steady

The annual Kaiser Family Foundation/Health Research Education Trust Employer Health Benefits Survey has been released. As many expected, the increase in employer-based health costs from 2013 to 2014 was moderate.

Read the entire column at NCPA's Health Policy Blog.

Boom! Hospital Revenue Up 5 Percent in Twelve Months

This morning’s Quarterly Services Survey (QSS) released by the Census Bureau reported that hospitals’ revenue rose 4.9 percent from the end of the second quarter in 2013 to the end of the second quarter in 2014. From the first quarter to the second quarter of 2014, it jumped 2.8 percent, overcoming a first quarter drop of minus 0.8 percent. Revenue for ambulatory services rose only 2.4 percent in the same twelve months. It jumped 3.0 percent from the first quarter of 2014, but had dropped 2 percent in the first quarter from the end of 2013.

Read the entire column at NCPA's Health Policy Blog.

The State of Telemedicine - State By State

The American Telemedicine Association (ATA) has released two thorough and valuable reports on the state of telemedicine in all fifty states.

Read the entire column at NCPA's Health Policy Blog.

Who Should Regulate Telemedicine, and How?

The practice of medicine is regulated by the states. For many years, advocates of telemedicine have pointed to inconsistencies in how medical licensing boards recognize out-of-state physicians as a limit to telemedicine. In 2012, health economist Jason Shafrin reviewed literature, which indicates that requiring a doctor to be physically present with a patient to prescribe reduces access and harms patients.

The situation is coming to a head.

Read the entire column at NCPA's Health Health Policy Blog.

Visits to Emergency Rooms Increase Three Times Faster in States That Expanded Medicaid Than Those That Did Not

The Colorado Hospital Association has issued a report comparing certain trends in states that expanded Medicaid under Obamacare with states that did not. The most important take-away is how much Emergency Department visits increased in expansion states versus non-expansion states:

Read the entire column at NCPA's Health Health Policy Blog.

Indian Patients Suffer From India's Weak Patents

India’s recently elected Prime Minister, Narendra Modi, will visit the U.S. later this month. One of the sticking points in the U.S.-India relationship is weakness in India’s laws governing intellectual property (IP). The Global Intellectual Property Center of the U.S. Chamber of Commerce ranks 25 countries in its Global IP Index, and India comes in last place. Indian growth will continue to lag as long as this persists: Researchers have demonstrated the positive relationship between IP protection and a county’s prosperity.

Read the entire article at

Tuesday, September 9, 2014

Obamacare Has Eliminated 350,00 Jobs, Cut Small-Biz Payrolls $22.6 Billion

New research published by the American Action Forum further corroborates our conclusion that Obamacare is harming U.S. employment. In a new scholarly paper, Ben Gitis and colleagues estimate that:
…Affordable Care Act (ACA) regulations are reducing small business (20 to 99 workers) pay by at least $22.6 billion annually. In addition, ACA regulations and rising premiums have reduced employment by more than 350,000 jobs nationwide, with five states losing more than 20,000 jobs.
We found that, on average, employees who work a full year for a business with 50-99 employees lose $935 annually due to ACA regulations, while employees of businesses with 20-49 employees, on average lose $827.50 annually.
Read the entire column at NCPA's Health Policy Blog.

Third-Party Billing "Bordering On Mail Fraud"

Billing in U.S. health care: You can’t believe it until you’ve experienced it. Price transparency seems to be coming gradually, at least in convenient clinics and places like the Surgery Center of Oklahoma, which post their prices. However, when it comes to hospitals and health insurers, we do not appear to be making much progress.

Last month, I wrote about two healthcare experts who became patients and who got befuddled and bemused by the outrageous and appalling bills that started flying at them soon after their procedures. Here are a couple more examples:

Read the entire column at NCPA's Health Policy Blog.

After $26 Billion Spent, Electronic Health Records Only 4 Percent of Target

At a September 3 meeting of the Administration’s Health IT Policy Committee, the Administration disclosed that only 3,154 eligible professionals (doctors, dentists, etcetera) had “attested” to so-called “meaningful use Stage 2″ to get their bounties from the federal government for installing electronic health records. Only 143 hospitals had attested.

Read the entire column at NCPA's Health Policy Blog or The Independent Institute's Beacon Blog.

Monday, September 8, 2014

Laszewski, Back From Summer Vacation, Still Predicts Obamacare Train Wreck

If I have one complaint about the summer of 2014, it was the absence of health insurance expert Bob Laszewski from his blog since July 31. Well, he came back last Sunday, and the summer break did not temper his criticism of Obamacare.

Read the entire column at NCPA's Health Policy Blog.

Obamacare and Employment: Not Good

The media cheered a report published by the Urban Institute and the Robert Wood Johnson Foundation, which asserts that Obamacare (“the ACA”) does not explain the high proportion of part-time workers.

Yes, it does - and more.

Read the entire column at NCPA's Health Policy Blog.