Friday, August 29, 2014

Obamacare Exchanges Are As Broken As Ever

Let’s go into the Labor Day weekend with a reminder of something that the Administration would like us to forget: Obamacare’s exchanges are as broken as they ever were.

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

Families USA Has An Excellent Report on Price Transparency - Really

Families USA, a leftist advocacy outfit often criticized in this blog, has published an excellent — not perfect — report on price transparency. Maybe it’s just because I’m feeling generous going into the last long weekend of the summer, but I think this report deserves a shout out from our side.

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

Only Two Percent of Small Businesses Have Checked Out Obamacare's Small Business Exchanges

As well as health insurance exchanges for individuals, which have suffered much criticism for their failings, Obamacare created exchanges especially for small businesses: Small Business Health Options Program (SHOP).

SHOP is a bigger failure than the exchanges for individuals. SHOPs were supposed to open up nationwide on October 1, 2013, alongside those exchanges. However, the deadline was deferred, and only 15 states currently have SHOPs.

And they are a complete bust. Only two percent of eligible small businesses have “checked out” SHOPs, and few of them have enrolled.

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

Roche Take-Over of InterMune A "Rebuke" To FDA

The Wall Street Journal editorial board has an interesting take on Roche’s takeover of InterMune, calling it a “rebuke” of the FDA, and a "guided missile" aimed at the bureaucracy.

I’m not quite sure how the takeover is a “guided missile” at the FDA: Corporate takeovers do not change the behavior of the FDA. Nevertheless, the editorial introduces an interesting way to look at the harm the FDA does.

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

The U.S. Is Losing The Ability To Maintain High Health Spending

One complaint about American health spending is that we spend too much. It usually looks like this: “We spend 17 percent of our Gross Domestic Product (GDP) on health care. The next most expensive country is Switzerland, which spends 12 percent.” Put that way, it does seem like we are spending too much. However, it invites another question: Is the five percent extra that we spend on health care taking away from other goods and services we need?

The answer to that question is no. But that is changing with Obamacare.e-spending/#ixzz3BmoNnyHk

Read the entire column in The Daily Caller.

Thursday, August 28, 2014

Federal Medicare, Medicaid, Obamacare Subsidies To Increase 85 Percent in 10 Years

On Wednesday, the Congressional Budget Office (CBO) released its Update to the Budget and Economic Outlook: 2014 to 2024.

Ths is the year that spending on major health programs (Medicare, Medicaid, and Obamacare subsidies, but not VA or military health care) will be greater than spending on Social Security. Back in 1974, federal spending on its major health programs accounted for 1.0 percent of GDP, while spending on defense (which is actually delegated to the federal government in the Constitution) was 5.4 percent of GDP. In 2024, defense spending will account for only 2.7 percent of GDP — less than half the spending on major health programs.

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

Wednesday, August 27, 2014

Here's Why States Can't Make Money By Expanding Medicaid

Obamacare encourages states to expand significantly the number of their residents dependent on Medicaid, the joint state-federal program for low-income households. It significantly increases federal funding for expanding this dependency. However, the Supreme Court has declared that the states do not have to accept this expansion.

So, the Administration and its allies have been reduced to arguing that expanding Medicaid is sort of a profit center for states that do it.

And yet, despite federal “generosity”, Medicaid continues to devour state budgets.

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

Can Taxpayers Recover Hundreds of Millions of Dollars From Obamacare Exchanges?

The Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services has just released a report on the contracts issued to private vendors to set up the federal pieces of Obamacare’s disastrous health insurance exchanges.

The OIG identified 60 contracts that started between January 2009 and January 2014. (That start date is a little mysterious, because Obamacare was not signed into law until March 2010.) The total estimated value of the contracts, when they were signed, was $1.7 billion.

However, only $800 million has been obligated, and $500 million spent.

How can taxpayers recover this money?

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

Are Medicare Advantage Plans Overpaid And Corrupt?

Medicare Advantage consists of private plans in which Medicare beneficiaries can choose to enroll. They were made more popular by the Medicare Modernization Act of 2003, which also introduced Medicare’s drug benefit (Part D). If not for Medicare Advantage, beneficiaries 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’s sort of like Gosplan, the old Soviet economic pricing and planning mechanism.

To escape this fate, one third of Medicare beneficiaries now choose Medicare Advantage plans. However, they are criticized for being paid too much and defrauding the federal government.

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

Tuesday, August 26, 2014

Medicare Fees: The RUC Is Bad, But There's No Point Regulating It

Politico recently ran an interesting story on the Relative Value Scale Update Committee — the “RUC”, a body convened by the American Medical Association that fixe the fees that Medicare pays physicians. It describes the absurdity of a committee of physicians fixing fees that the government pays physicians, and demonstrates how the RUC pays primary-care practitioners much less than specialists.

The Politico story also described a lawsuit which asserts that the RUC should be regulated like a Federal Advisory Committee, and not allowed to operate in secret as if it were just another committee of a private professional society.

Nevertheless, regulating the RUC as a Federal Advisory Committee would not solve the fundamental problems.

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

Saturday, August 23, 2014

Obamacare's Metallic Plans: Add Cash As Well As Copper

Avalere Health has given a budget score to the so-called “copper plan”, a potential Obamacare policy proposed by health insurers that would cover 50 percent of the actuarial value (AV) of the policy. AV is the average amount a plan with a given set of benefits is likely to pay, given a standard population.

Actually estimating actuarial value in Obamacare is complicated. Keeping it simple: we can say that if the standard population would cost $8,000 per beneficiary, a copper plan would expect to pay $4,000 of the costs. Currently, Obamacare plans are bronze, silver, gold, and platinum, with AVs ranging from 60 percent to 90 percent.

Insurers should be free to offer copper, or lead, or brass or whatever policy they want. However, as long as the federal government is subsidizing insurers billions of dollars in these exchanges, it should offer some of the money for beneficiaries’ direct use, via deposits in Health Savings Accounts, Health Reimbursement Arrangements, or Flexible Spending Arrangements, instead of handing it over to insurers.

Read the entire column at

Friday, August 22, 2014

Mid-Atlantic Employers Cut Benefits: Obamacare To Blame

Yesterday, we discussed the New York Fed’s survey of employers in its region, in which they blamed Obamacare for raising health insurance premiums 10 percent.

The Federal Reserve Bank of Philadelphia has just released a similar survey, with similar results.

Read the entire column at the NCPA Health Policy Blog.

Obamacare Vs. America's National Pastime

In case you still doubt that Obamacare’s costly mandates are causing employers to cut workers’ hours, you need to learn what it is doing to the game of baseball.

Last Tuesday’s game between the San Francisco Giants and the Chicago Cubs was marred by a farcical unrolling of the tarp when rain started pouring down.

The reason: A shortage of seasonal workers, who have to be kept under 130 hours per month.

That’s the full-time worker definition under “Obamacare,” which requires employer-provided healthcare benefits for “big businesses” such as a major league team.

Read the entire article at the NCPA Health Policy Blog.

Thursday, August 21, 2014

New York Employers: Health Costs Up 10 Percent, Obamacare To Blame

The New York Fed has published the results of its latest Empire State Manufacturing Survey and Business Leaders Survey (which covers both manufacturing and services). It’s devastating news for Obamacare. Business leaders expect health costs to rise ten percent next year. About 73 percent (almost three quarters) of the business leaders blamed Obamacare for some of the increase.

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

Medical-Device Excise Tax Revenues 24 Percent Below Target

The medical-device excise tax is supposed to raise $20 billion of Obamacare’s $438 billion of revenue through 2019. The IRS started collecting the tax in January 2013, and expected to get $1.2 billion in the first half of 2013. The actual take? $913 million — a shortfall of almost one quarter.

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

Patient Power Puts Pressure On Prices

A study recently published in Health Affairs describes how price transparency drove down the cost of MRIs by almost twenty percent from 2010 to 2012. Compared to patients who did not have the advantage of transparent pricing, cost per procedure dropped $220. Further, there was a significant shift from hospitals to outpatient facilities.

This result is just the beginning.

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

Wednesday, August 20, 2014

Physicians' Political Contributions Switched From Republican To Democrat In Twenty Years

One of the most interesting things about health politics and policy is that those mostly responsible for driving health costs — physicians — are the least concentrated interest group. If we want to know what the research-based pharmaceutical industry, the generic drug industry, the health insurers, the hospitals, or the medical-device makers want, we know where to go to find a fairly unified answer.

Physicians have no unified voice. The closest thing to a professional association for all physicians should be the American Medical Association, but it is not. It is a business that profits from a government-sanctioned monopoly on billing codes.

So, how do physicians engage the increasingly politicized healthcare system? They have dramatically increased their political donations, according to a new study in JAMA Internal Medicine. Furthermore, as the proportion of women practicing medicine has increased, so has the tilt towards Democrats.

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

There Is A Market For Human Organs, Whether You Like It Or Not

The buying and selling of human organs was in the news this weekend, via an investigative report in the New York Times. People tend to be moved when they learn about someone donating an organ to someone else who needs it, but they also tend to be disgusted by the notion of a market where people can sell their organs to strangers. Naturally enough, this market consists of high-income patients and low-income donors.

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

Drug Discounts Should Go To Poor Patients, Not Hospitals

n 1992, the federal government mandated discounted drug prices for certain “safety-net providers”. The purpose was to ensure that these facilities, which served low-income patients, could acquire medicines at low prices to dispense to those patients. The drug-makers finance the discounts.

The 340B program is a roundabout way to finance a welfare benefit. The primary beneficiaries are hospitals, although only outpatient drugs are discounted via the 340B program. Evidence suggests that the program has become a profit center for hospitals. The number of sites benefitting from the program has doubled in ten years, to 16,500 across the country.

Are we meant to believe that the number of poor people has doubled in a decade? Even in the Obama economy, that would be a stretch. On the contrary, hospitals’ persistent lobbying has resulted in ever-expanded definitions of “safety net”; and the accounting requirements demanded by the government are byzantine.

Read the entire column at NCPA's Health Policy Blog

Are Patents Leading To Drugs That Cure The Wrong Patients?

That’s not a headline you’ve read before, I’ll bet. New evidence suggests that drug companies invest too much in therapies targeting diseases at late stages, and not enough in prevention or early-state therapies.

It is emotionally satisfying and socially acceptable to say that buying an extra few months of life is priceless, but if resources invested in such drugs could have been invested in drugs that would have dramatically increased the quality or length of lives of other patients, it is not evil to suggest that the resources were misallocated.

Read the entire column at

Medicaid Patients Use The ER Because They Have To, Not Because They Want To

It is well established that Medicaid patients use emergency rooms more than either uninsured or privately insured patients. What has been debated is whether their use of the ER is necessary or unnecessary. Well, it turns out that that depends on how you look at it. Obviously, not many people go to the ER because they enjoy the experience and have nothing better to do. However, medical problems that cause them to go to the ER could often be dealt with in a doctor’s office.

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

Wal-Mart Shakes Up Primary Care - And The Whole System

Wal-Mart has a new take on retail clinics. These newly launched clinics will charge patients $40 for a visit — but only $4 for Wal-Mart associates. Anybody, with or without insurance, can go into one of these clinics and be seen by a qualified health professional, without the usual paperwork. Although the mega-retailer has operated clinics in its stores for a few years now, the new ones are different in a couple of ways.

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

Tax Expenditure From Employer-Based Health Plans: $785 Billion In Five Years

How much tax revenue does the Treasury lose by exempting employer-based benefits from households’ taxable income? $785.1 billion over the next five years, according to the latest estimate by the Joint Committee on Taxation.

To put that in perspective, Obamacare’s exchange premium tax credits and cost-sharing subsidies are reckoned to amount to $276 billion over the same period. So the exclusion of employer-based benefits from taxable income costs 2.8 times more than the Obamacare tax credits.

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

People Are Not Very Satisfied With Their Health Plans

The Employee Benefit Research Institute (EBRI) has just released a survey of beneficiaries in traditional health plans, high-deductible health plans (HDHPs), and consumer-driven health plans (CDHPs). EBRI defines a CDHP as a HDHP with a Health Savings Account or Health Reimbursement Arrangement. What is interesting about the results is that satisfaction in traditional plans dropped significantly in 2010 and has never recovered.

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

Obamacare Enrollment Is Shrinking

After Obamacare’s first open enrollment ended, the Administration stopped releasing enrollment figures. Jed Graham (no relation) of Investors Business Daily has been following the health insurers, and has come to a startling conclusion — Obamacare enrollment is dropping.

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

Tuesday, August 19, 2014

What Is To Be Done With Health Insurance Exchanges, Post-Obamacare?

Any time a Republican politician suggests that there is anything positive in Obamacare, the media are eager to declare this means the Republican establishment is backing away from repealing the Affordable Care Act and wants to “fix” it instead.

This, of course, is what most businesses and their lobbyists would prefer take place. It is consistent with the Kaiser Family Foundation’s drumbeat of monthly polls reporting that “over half the public has an unfavorable view of the Affordable Care Act (ACA) in July, up eight percentage points since last month,” but that a “majority continues to prefer Congress improve ACA rather than repeal and replace.”

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

7.2 Million Americans Dependent on Medicaid Since Obamacare Opened

The Center for Medicare & Medicaid Services (CMS) has just released more data corroborating our previous conclusion that Obamacare is mostly an expansion of welfare dependency.

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

Four Months Of Health Price Inflation: Longest Trend Since January 2012

The Altarum Institute’s latest Price Brief shows that prices of healthcare goods and services are rising.

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

Health Care Prices Flummox The Experts

The absurdity of our healthcare pricing is never more clear than when described by experts — people who study the system for a living — who become patients and are shocked and confused by the bills that hit them. Here are three examples:

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

Monday, August 11, 2014

Libertarians Against Innovation?

Two researchers at the Mercatus Center, a think tank that produces excellent research on any number of economic issues, have published a challenge to intellectual property — trademark, copyright, and patents. The paper ridicules claims made by a number or sources in the last few years that laws which protect intellectual property (IP) create jobs. For example, The U.S. Chamber of Commerce’s Global Intellectual Property Center, which estimates that 55.7 million jobs are created by IP. The paper challenges the evidence presented by these sources, and rebuts them with — to be blunt — a purely theoretical, evidence-free argument.

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

Good News For Obamacare: IRS Calculates Subsidies Right 99.99 Percent Of The Time

We’ve previously discussed that income, citizenship, or immigration data cannot be reconciled for one quarter of Obamacare beneficiaries.

Well, it appears that the IRS (which pays tax credits to insurers based on the income and family size of people who enroll) has its act together, according to a July audit.

So, are Obamacare’s data problems solved? By no means: The critical term in the passage is “based on information furnished by the Exchange.”

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

Direct Primary Care Has Exploded Since Obamacare

The goal of Obamacare is to increase the number of people with health insurance. Remarkably, its passage has coincided with an explosion in the number of primary care physicians who do not take health insurance.

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

Obamacare Threatens Free Clinics

Obamacare’s most significant effect is an expansion in the number of people dependent on Medicaid, the joint state-federal welfare program for low-income people. Kaiser Health News points out that this is threatening the existence of free clinics. Some are signing up for Medicaid, while others are closing.

It does not appear that access to care has changed for these patients — at least in the short term. However, the change in cash flow mean that the clinics are now more accountable to the federal government than private donors and local government. That will likely increase the bureaucratic burden and decrease quality of care in the long term.

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

Medical Auction Website Puts Patients In Charge of Prices

MedCity News has profiled Medibid, a business that connects patients to physicians who compete on price, through auctions, to treat them.

One major reason costs are lower than in the traditional system is that insurers are cut out, reducing administrative costs significantly. However, the article reports complaints by hospitals, who cannot stand to see fees cut.

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

Price Transparency: Even Hospitals Are Starting To Figure It Out!

ike many, we’ve been frustrated at the lack of price transparency in U.S. health care, especially form hospitals. Good news: They are coming around!

The American Hospital Association (AHA) has published an informative white paper, clearly explaining the state of price transparency for both hospitals and health plans,

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

Health Spending Slowed Because Of Recession, Not Obamacare

Health spending has been slow in the U.S. for a number of years. It’s clearly not due to Obamacare. New research by Professor David Dranove and colleagues corroborates that the recession, which started in 2007, is mostly responsible for the reduced rate of growth of health spending:

Read the entire column at NCPA Health Policy Blog.

HSA Update: Assets In Health Savings Accounts Almost $23 Billion In June

According to Devenir's latest report, HSA assets almost reach $23 billion. HSA accounts rose to 11.8 million, holding assets totaling over $22.8 billion, a year over year increase of 26% for HSA assets and 29% for accounts for the period of June 30th, 2013 to June 30th, 2014.

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

Who's Moving To Consumer-Driven Health Plans? Doctors' Offices!

We have long cheered the rapid growth in consumer-driven health plans. Here’s more good news: Medical groups are increasingly covered by these policies. The American Medical Group Association just released a survey of its members. Doctors' offices are moving rapidly to cover their employees with consumer-driven plans.

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

Reforming Health Insurance To Promote Pharmaceutical And Diagnostic Innovation

Sovaldi is a wonder drug that effectively cures a strain of the Hepatitis C virus. The headline price of Sovaldi is $1,000 per pill, or $84,000 for a course of treatment. Too expensive? That’s what the head of the health insurers’ trade association says, and many agree with her.

This charge is inaccurate. The problem with Sovaldi is that all the costs are upfront. Spending $84,000 in a few months will potentially save hundreds of thousands of dollars down the road

Read the entire column at NCPA'sHealth Policy Blog

Friday, August 8, 2014

The Health Insurance Bureaucracy Lives:

You know it never died. But in the health policy world, it is so easy to get caught up in the lingo used at conferences and in journals — Accountable Care Organizations, Pay-For-Performance, Population Health Management — that it’s easy to delude yourself into thinking that things have actually improved for the doctors and patients. So, it is valuable to get kicked back into reality by an actual practicing physician who takes the time to put pen to paper and write about her experience.

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

Medicaid's Perverse Financing Merry-Go-Round

Medicaid, which provides health-related welfare benefits to low-income individuals, is jointly financed by the federal and state governments. Before Obamacare, the split was 50/50 for rich states, but low-income states got more dollars. This mechanism is called the Federal Medicaid Assistance Percentage (FMAP). So, if California spent $50 on Medicaid, the federal taxpayer would chip in $50. However, for West Virginia, the split is 28.65/71.35. That is, for every hundred dollars spent on Medicaid, only $28.65 is spent by the state, and $71.35 comes from federal taxpayers. These dollars are not appropriated by Congress: They just roll out on auto-pilot, as calculated by the FMAP.

Just think of the perverse incentives this gives state politicians and bureaucrat

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

Faster FDA Approvals Have Not Caused More Drug Safety Problems

The media gave some attention to a new study, which suggested that the Food and Drug Administration (FDA) recklessly allows unsafe new prescription drugs onto the market. The research supports a longstanding suspicion that the Prescription Drug User Fee Act (PDUFA), first passed in 1992 and renewed every five years, has caused the FDA to view the research-based pharmaceutical industry as a “partner” and source of revenue, rather than a regulated industry.

The conclusion is sensationalist, to say the least.

Thursday, August 7, 2014

Is Consumer-Driven Health Care Hurting Hospitals? And Should We Care?

Dobson DaVanzo, a leading consulting firm, has produced a report for the Federation of American Hospitals, the trade association for for-profit hospitals. The report notes that the rate of change of health spending has slowed down. Indeed, the report concludes that spending is set to shrink this year by over one percent. This introduces a “paradox”.

We think this “paradox” is explained by consumers gradually becoming free of the money illusion that someone else (usually, the employer) is paying for their health care.

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

Repealing the Medical-Device Excise Tax: Next Steps

Where is the momentum to repeal the medical-device excise tax? The tax is a universally reviled Obamacare revenue-raiser. First levied in 2013, it skims 2.3 percent off the sales of medical devices in the U.S. Outside liquor and tobacco, most Americans don’t suffer excise taxes, which are levied on gross sales, irrespective of a company’s profitability.

Repealing the excise tax has wide bipartisan support in both chambers of Congress. Obamacare champions including Representative Nancy Pelosi and Senator Al Franken – both of whom voted to impose the tax when they voted for Obamacare – have manned the ramparts for repeal. Unfortunately, they cannot get a bill to the President’s desk. Further, early forecasts of catastrophe for the industry to do not appear to be playing out. A recent report from EP Vantage concludes that thirteen of the fifteen largest medical-device makers increased headcount in 2013, and two of the three who shrunk did so through selling subsidiaries.

This is not what were led to expect before the excise tax started to bite.

Read the entire column at

Wednesday, August 6, 2014

"Bitten By An Orca": The Much Ridiculed ICD-10 Codes Are Finally Coming

For quite a few years now, the Centers for Medicare And Medicaid Services (CMS) has  been trying to convert the U.S. healthcare system to a new system diagnostic codes, which are used for a number of purposes, including billing.

The codes are easily ridiculed. There is one code for being “bitten by an orca”. If the first encounter did not teach you to keep your distance, there is another code for being “bitten by an orca, subsequent encounter

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

Monday, August 4, 2014

Medicare Part D Drug Plan Costs Half Of Original Estimate

The Congressional Budget Office (CBO) has released a report on the remarkable budgetary achievement of the Medicare Part D prescription-drug benefit:

A combination of broader trends in the prescription drug market and lower-than-expected enrollment in Part D has contributed to much lower spending for the program — about 50 percent lower in 2013 — than CBO projected when the MMA became law in 2003.

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

Patents Are Critical To Pharmaceutical Innovation

One of the reasons why Sovaldi, for example, costs so much is that competitors cannot copy the pill and just churn it out at a lower price. It is protected by patents. Clearly patents have costs, and this blog has discussed alternatives.

No alternative has demonstrated that it can do what patents do: Attract R&D capital investment to pharmaceutical development. Will Rinehart of the American Action Forum has written a primer on the role of patents in pharmaceutical innovation:

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