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.