Gross Domestic Product: Is Health Spending Figured Out?

Health spending was a non-issue in the Department of Commerce’s release of the advanced estimate of second-quarter GDP, which came in at four percent (annualized). Much of the second quarter’s improvement was business spending and consumer spending on durable goods. Health spending increased by a muted 0.08 percent. The final estimate for first-quarter GDP was improved to minus 2.1 percent, up from minus 2.9 percent.

What is a relief is that the final estimate for health spending in the first quarter, minus 0.16 percent, was unchanged from the previous estimate.

Read the entire column at the National Center for Policy Analysis Health Policy Blog, or the Independent Institute's Beacon blog.

Should Politicians Fix Sovaldi's Price?

Gilead (NASDAQ: GILD) has become the whipping boy du jour for the forthcoming Obamacare-driven cost explosion in government and private health spending. Apparently, everything was going swimmingly until Gilead – right out the blue! – dropped a cure for Hepatitis C on the market and threw everyone’s spending projections into a tizzy.

Politicians and the health-insurance industry have embarked on a high-profile campaign to shame Gilead for the price of its new wonder-drug, Sovaldi, which can add up to $84,000 for a course of treatment. If successful, this campaign will have terrible long-term consequences for medical innovation

Read the entire column at Forbes.

How To Pay For The Next Sovaldi?

Imagine a pill that could cure cancer with one course of therapy or reverse an inherited, deadly disease. If it cost $1 million, could you access it?

This was the question asked at a recent panel discussion held by the American Enterprise Institute. The panel discussed a couple of new proposals to finance new medicines that come at a high price. Because these medicines address the needs of only a small number of patients, manufacturers contend that prices need to be high to make the investment worthwhile.

Read the entire column at the Independent Institute's Beacon blog or the National Center for Policy Analysis Health Policy Blog.

Household incomes have been shrinking as a share of GDP for some years now. However, households alsocontrol less of their own consumption than they did in earlier decades. When third parties control so much of what we consume, and we believe those third parties are financed by others, it is unsurprising that those third parties will seize control of a greater share of GDP. In 1959, households financed 92.8 percent of their own consumption. By 2009, that had fallen to 70.3 percent, with government and employers supplying the balance.

Read the entire column at the National Center for Policy Analysis Health Policy Blog or the Independent Institute's Beacon blog.

"Prize-Grants" Or Patents For Pharmaceutical Innovation?

Over at the American Enterprise Institute’s online magazine, Arnold Kling has proposed “prize-grants” in favor of patents for pharmaceutical research. Kling dislikes patents: Their drawbacks are well recognized, and a better alternative would certainly be most welcome. The question is: Can there be a better alternative? Kling’s “prize-grant” has the features of both a prize and a patent.

It is a very interesting idea, which I hope Professor Kling continues to develop. By way of constructive criticism, there are some obstacles that need to be overcome.

Read the entire column at the Independent Institute's Beacon blog or the National Center for Policy Analysis Health Policy Blog

Public Event: Health Care Spending and The Affordable Care Act: July 23, 2014 in Washington, DC

What effect is the Affordable Care Act (ACA) having on health care spending? Is the ACA bending the cost curve downward, or will health care spending outpace other spending? What predictions can we make about future health care spending?

This briefing will feature new data and analysis from NCPA senior fellows Thomas R. Saving, Andrew J. Rettenmaier, and John R. Graham.

Details:
Wednesday, July 23, 2014
12:00-1:00 PM
B-318 Rayburn House Office Building
Washington, D.C.

For more information and to register, please see here.

Tax Reform, Not Tax Inversions, Will Rescue U.S. Medical Innovation

A Goldman Sachs research note explains the stakes in the current spate of tax-inversion deals by U.S. firms taking over foreign targets. Most of the listed firms in the pharma, bio, and medical-device industries have over half their sales outside the U.S. Because of our horrific corporate tax code, they end up with incredible chunks of cash overseas. Eli Lilly, for example, has 89 percent of its cash overseas. Edwards Lifesciences, Amgen, Merck, Varian, Covance, Baxter, and Abbot all have at least 80 percent of their cash offshore.

Because they cannot bring the cash back home without greedy politicians getting their hands on it, these firms’ ability to invest in the U.S. is limited.

Read the entire column at Forbes.com or the National Center for Policy Analysis Health Policy Blog

Health Spending Has Grown Slower In U.S. Than Other Countries (But It Won't Last)

We have been skeptical that Obamacare explains the slow rate of growth in health spending. A new research paper by Luca Lorenzoni and colleagues, from the Organization for Economic Co-operation and Development confirms not only that the slowdown occurred well before Obamacare, but that the effect was stronger in the U.S. than in Canada, France, Germany, the Netherlands, and Switzerland.

The report shares some disturbing data.

Read the entire column at the Independent Institute's Beacon blog or the National Center for Policy Analysis Health Policy Blog.

Reform Health Care To Make Hobby Lobby Irrelevent

Employers should not interfere with their employees’ health-care choices — just as they should stay out of their housing, travel, and entertainment decisions. Unfortunately, the federal tax code penalizes employees who buy their own health insurance, effectively forcing most of us to get coverage through our employers.

Rather than solving this problem, Obamacare worsens it by adding layers of complexity and extra costs. It retains the employer-based health plan, and adds more government interference on top of it.

Read the entire column at The Daily Caller.

Understanding Waiting Times For Health Care

In Sunday’s New York Times, reporter Elizabeth Rosenthal discusses evidence that that waiting times for medical care in the United States do not always compare favorably with those of other developed countries.

I don’t think I've met anyone, pro- or anti-Obamacare, who does not expect waiting times to increase as long as Obamacare exists. So, we better get used to them. How to explain them?

Read the entire article at the national Center for Policy Analysis Health Policy Blog or the Independent Institute's Beacon Blog.

Another Cover-Up? IRS and Social Security Administration Not Cooperating with Obamacare Fraud Investigation

In early June, we learned that over two million (of a total of eight million) Obamacare applications lacked income, citizenship, or immigration data to verify eligibility for Obamacare’s tax credits. In the middle of the month, the Obama administration began contacting “hundreds of thousands of people with subsidized health insurance to resolve questions about their eligibility, as consumer advocates express concern that many will be required to repay some or all of the subsidies.”

Now, the Inspector General (IG) of the U.S. Department of Health and Human Services has confirmed that the agency was lax in preventing ineligible enrollments: “The deficiencies in internal controls that we identified may have limited the marketplaces’ ability to prevent the use of inaccurate or fraudulent information when determining eligibility of applicants for enrollment...”

That’s putting it mildly. Far worse is that the IG is unable to investigate eligibility based on income or residency because the IRS and Social Security Administration appear not to be cooperating with the investigation.

Read the entire column at the Independent Institute's Beacon Blog or the National Center for Policy Analysis Health Policy Blog.

Does the United States Over Diagnose Cancer?

Ezra Klein challenges the notion that patients in the United States get better cancer treatment than patients in other developed countries.

Klein goes on to report that actual death rates (in the U.S. population) have not really changed for many cancers, despite much greater detection. Further, this epidemic of over diagnosis can cause harm, because people will undergo surgery who don’t need it.

Although this argument is not trivial, I find it hard to accept.

Read the entire column at the National Center for Policy Analysis Health Policy Blog or the Independent Institute's Beacon Blog.

Health Spending And First Quarter GDP: What Happened?

A couple of months ago, the Bureau of Economic Analysis told us that first quarter Gross Domestic Product (GDP) was going to decline by one percent, prevented from tanking only by explosive growth in health spending.

However, the final estimate of real first quarter GDP has thrown everyone for a loop, reporting an annualized decline of 2.9 percent. It was the hugest revision in years.

The huge error in the earlier figure was almost entirely driven by a poor estimate of the effect of Obamacare by the Bureau of Economic Analysis.

Read the entire column at Forbes.com, the Independent Institute's Beacon Blog, or the National Center for Policy Analysis Health Policy Blog.