Hospitals' Uninsured Patients Rising Again

Remember how Obamacare was supposed to reduce the burden of so-called “uncompensated care” from uninsured patients that was driving hospitals bankrupt? Well, two years into Obamacare it hasn’t worked out that way.

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

Health Services Accounts for One Fifth of Weak Q3 GDP Growth

Today’s advance estimate of Gross Domestic Product for the third quarter indicates growth in health spending is maintaining a disproportionate share of weak GDP growth. Commenters noted that the weak estimate was largely due to shrinking inventories. This explains why personal consumption expenditure (PCE) growth ($135.7 billion) was actually higher than GDP growth ($121.1 billion), quarter on quarter.

Nevertheless, spending on health services grew faster (1.22 percent) than spending on all services (1.13 percent) or PCE (1.11 percent.) The growth in health services spending ($25.1 billion) accounted for one fifth of all GDP growth.

Read the entry at NCPA's Health Policy Blog.

Health Care And The Budget Deal: Three Steps Forward, One Step Back

Yesterday, the White House and Congressional leaders announced a last-minute budget agreement that avoids a so-called government shut-down for now. The deal has four health-related items, and is expected to reduce net federal health spending by about $4.5 billion over five years, and $15.5 billion over ten years. Overall, it is not a bad deal with respect to health care. However, some of its budget savings are fragile and it largely avoids reforms that will actually reduce the growth of health spending.

Read the entire column at Forbes.

The U.S. is the Third Lowest Health Spender of 13 Developed Countries

Scholars affiliated with the Commonwealth Fund recently published another report in the Fund’s series of international comparisons of U.S. health care. These reports are always well received by the media, which run articles lamenting how expensive U.S. health care is, and how great a burden on the country. Encouraged by the Commonwealth Fund to conclude that the major difference between health care in the U.S. and other developed countries is that they have “universal” health systems, many reasonable people understandably conclude that such a reform could reduce the cost of U.S. health care.

These results certainly invite us to question whether we are getting our money’s worth. However, it is not clear that this spending is a burden on the U.S., given our very high incomes. Table I shows that when we subtract U.S. health spending from our Gross Domestic Product (GDP), we still had $44,049 per capita to spend on everything else we value. Only two countries, Norway and Switzerland, beat the U.S. on this measure. In the United Kingdom for example, GDP per capita after health spending was only $34,863 in 2013. So, even though American health care is significantly more expensive than British health care, the average American enjoyed $9,185 more GDP after health spending than his British peer, and just under $6,000 more than his Canadian neighbor.

Read the entire column at Forbes.com.

Another Day, Another Obamacare COOP Closes

Did the sun come up this morning? That must mean another Obamacare COOP has closed. This time, it is in South Carolina.

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

A Brief Note on the Canadian Election and Health Care

This is a screenshot of an ad run by the New Democratic Party (NDP) in the Canadian federal election held last Monday, October 19. Although the single-payer Canadian system is run by the provincial governments, the question of funding it dominates federal elections.

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

High Deductible Health Insurance Crushes Health Spending

A new working paper published by the National Bureau of Economic Research (NBER) shows how much high-deductible health plans reduce spending. Sarah Kliff of Vox.com summarized the details:

Average per-patient spending fell from $5,222.60 in 2012 to $4,446.08 in 2013. That's about a 15 percent decline in a single year — and it held true across all types of health services. Between 2012 and 2014, there was a 25 percent drop in emergency room spending, an 18 percent decline in physician office visits, and a 6 percent decrease in mental health services.

Ms. Kliff indicates “this study is forcing economists to rethink high-deductible health insurance” for a few reasons. The two most important ones are that sick people cut spending as much as healthy people; and that patients did not shop around for better prices, but simply did not seek care.

I don’t think this research demands a do-over for high-deductible health plans at all

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

Physicians for a National Health Program's Red Herring

The tireless Dr. Steffie Woolhandler, American champion for government monopoly, so-called “single-payer” has contributed a blog entry to a New York Times “Room for Debate” discussion on whether the U.S. should be more like Denmark (as suggested by Senator Bernie Sanders in the recent Democratic presidential candidates’ debate):

By the end of the 20th century, the U.S. was the lone hold out for private, for-profit health insurance, and its health statistics lagged behind dozens of countries. Meanwhile, costs soared to twice the average in other wealthy nations.
Other countries have seen huge savings by evicting private insurers and the reams of expensive paperwork they inflict on doctors and hospitals.
Obamacare will direct an additional $850 billion in public funds to private insurers, and boost insurance overhead by $273.6 billion.

One interesting thing about the fight against Obamacare is that the single-payer extremists and the free-market advocates agree that Obamacare is fundamentally unjust, in that it compels citizens to hand their money over to private health insurers.

Read the entire entry at NCPA's Health Policy Blog,

Colorado Health Insurance COOP Closed

Last Friday, Colorado’s Division of Insurance ordered the state’s Obamacare COOP not to offer policies in the state’s Obamacare exchange next year. Obamacare’s COOPs are cascading into collapse quite quickly. NCPA has been studying them since last June, and our research has been prescient.

Obamacare COOPs were specifically stood up by the Affordable Care Act with government loans. They cannot hide their Obamacare losses like larger, incumbent insurers (for which Obamacare exchanges are small parts of their businesses) can.

To show how fast the fall of this COOP has happened, I’ll share three stories.

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

Jeb Bush Health Plan: Innovation and Patient Care

By avoiding sound bites and respecting voters’ ability to understand issues, Governor Jeb Bush’s health-reform proposal demonstrates strong leadership. Repeal and replace Obamacare? Sure, Bush is for that, but no Republican politician should win points simply by regurgitating what many citizens fear has become little more than a slogan.

What is especially impressive is that Bush leads with a non-Obamacare issue  – fundamental reform of the Food and Drug Administration (FDA): “It should not cost $1.2 billion to $2.6 billion nor take 12 to 15 years to advance a medicine from discovery to patients, but that is the case under the Food and Drug Administration’s current regulatory mess.”

Read the entire op-ed in The Hill.

Peak Obamacare? We're Almost There

The administration has released a report estimating that enrolment in Obamacare will reach only 9.4 million to 11.4 million at the end of 2016. Back in 2010, when the law was passed, the Congressional Budget Office estimated exchange coverage would be 21 million next year (Table 4).

One year ago, I coined the term “Peak Obamacare” to describe this phenomenon. Although the administration’s cheerleaders have twice celebrated very high Obamacare enrolment during open season, the administration has finally decided to accept reality: We are on the verge of Peak Obamacare.

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

Obamacare COOPs' Loans Are "Assets"

My colleague Devon Herrick was prescient about the collapse of Obamacare’s COOPs (nonprofit cooperative insurers set up with government loans to compete unfairly in Obamacare’s exchanges), writing an Issue Brief on the topic last June.

Since, then Obamacare’s COOPs have continued to collapse, stranding almost half a million Obamacare beneficiaries. Chris Jacobs of the Conservative Review has written about the administration’s latest attempt to rescue the remaining COOPs, by rebranding their liabilities as “assets”.

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

CPI: Deflation Except in Health Care (Again)

I admitBLS this is getting a little repetitive, but it is not my fault the Bureau of Labor Statistics (BLS) releases the Consumer Price Index one day after the Producer Price Index. The CPI confirms (once again) the price behavior indicated by yesterday’s PPI.

While consumer prices were down 0.2 percent, month on month, and flat year on year, medical prices increased 0.2 percent and 2.5 percent (Table I). However, prescription drugs experienced quite moderate price increases last month. This means that while prices of medical goods and services overall increased, month on month, there was no sticker shock versus the CPI. Unfortunately, yesterday’s PPI suggests that price increases are flowing through the system again, and we can expect to see a pick-up in health prices versus overall inflation, in future CPIs.

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

PPI: Deflation Except in Health Care

September’s Producer Price Index declined 0.5 percent, month on month, and dropped 1.1 percent, year on year. A mild deflation appears to be taking hold in the general economy. However, it is not so in health care. Of the 14 sub-indices for health-related goods and services, only five declined month on month. Only three declined year on year (see Table I).

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

Hillary Clinton is Wrong on Prescription Drugs

With perfect timing, Hillary Clinton's presidential campaign announced a proposal to impose federal price controls on prescription drugs the day after Turing Pharmaceuticals declared it was raising the price of Daraprim, a medicine to combat the "toxoplasmosis" parasite, from $13.50 to $750 per pill.

Politically, Clinton may be on to something: In an August poll conducted by the Kaiser Family Foundation nearly three quarters of respondents said prescription costs are "unreasonable." Four in ten favored government regulation to keep costs down.

Daraprim's huge price increase, which was condemned by the pharmaceutical industry, has nevertheless thrust prescription drug prices into the political limelight after years of calm.

Read the entire op-ed at the Washington Examiner.

Jeb Bush's Health Plan

Jeb Bush’s health plan is out – and it is very good. Bush leads with fundamental reform of the Food and Drug Administration. “It should not cost $1.2 billion to $2.6 billion nor take 12 to 15 years to advance a medicine from discovery to patients, but that is the case under the Food and Drug Administration’s current regulatory mess.”

In recent weeks, we’ve read stories about drugs that have been around for decades, for which prices have been hiked sky-high. These price hikes are carried out by executives taking advantage of obscure FDA rules that impede competition.

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

Castlight Health: Pricing for Medical Services is All Over the Map

Castlight Health has published its second annual U.S. Costliest Cities Analysis, which shows astonishing variation for prices of medical procedures. This year’s report focuses on women’s preventive health, finding remarkable variance.

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

A Symptom, Not the Sickness: Health Insurance Consolidation

(A version of this Health Alert was submitted as testimony to the U.S. Senate Judiciary Committee.)

Chairman Lee, Ranking Member Klobuchar, thank you for the opportunity to submit this testimony on the impact of mergers in the health insurance industry. The two combinations of greatest concern are Anthem’s announced takeover of Cigna and Aetna’s announced takeover of Humana. Although tis hearing is narrowly focused on antitrust as enforced by the Department of Justice, it is also necessary to understand Obamacare as a cause of this consolidation.

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

FDA Driving Drug Prices into Stratosphere

BloombergBusiness has another story of a jaw-dropping price hike for a very old medicine. In this case,

Colchicine, a gout remedy so old that the ancient Greeks knew about its effects, used to cost about 25 cents per pill in the U.S. Then in 2010 its price suddenly jumped 2,000 percent.

How did this happen? Colchicine is one of a small number of drugs that were marketed before 1938. That year, the Food, Drugs, & Cosmetics Act was passed to require new drugs to be approved for “safety” as well as be “pure” (that is, not adulterated or misbranded as required since 1906).

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

Improper Payments Up 18 Percent; Mostly Medicare & Medicaid

The Government Accountability Office (GAO) has just reported that “improper payments” (that is fraud and abuse) are up to $124. 7 billion in 2014 from $105.8 billion in 2013. Most of this is Medicare and Medicaid.

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

Health Jobs Dominate Terrible Jobs Report

No good words were used to describe last week’s Employment Situation Summary: “Every aspect of the September jobs report was disappointing,” wrote Michelle Girard, chief U.S. economist at RBS (quoted in Forbes). This is largely a repeat of the August jobs report, although those and previous months’ figures were also revised downwards.

One quarter of September’s new jobs were in health services: 34,000 of 142,000 added to nonfarm payrolls (see Table II). Of those 34,000 health jobs, 37 percent were in ambulatory facilities, and 45 percent in hospitals. This is a change from the last few months. Because of a long-term shift in the location of care, there are now almost seven million people working in ambulatory settings, versus just under five million working in hospitals.

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

Selling Health Insurance Across State Lines

(A version of this Health Alert was published by The Hill.)

Here we go again: Republican politicians are rolling out an easily digested sound bite: Allowing health insurers to sell coverage across state lines would solve the problem of high premiums. In the current presidential race, Donald Trump, Sen. Marco Rubio (R-Fla.), Sen. Ted Cruz (R-Texas), Sen. Rand Paul (R-Ky.), Rick Santorum, Gov. Bobby Jindal (R-La.), and the recently departed Gov. Scott Walker (R-Wis.) all proposed it. It has been a feature of Congressional Republican proposals since at least 2010.

The only problem is that such a reform has no effect. Back in 2010, Georgia sacrificed its sovereignty to regulate health insurance, but premiums didn’t change. The reason is that if a health plan wants to offer coverage in a state, it already can easily do so. Health insurers enter and exit markets all the time. Aetna and Cigna are domiciled in Connecticut, but that does not prevent them from offering plans in other states. Insurance commissioners do not discriminate between in-state and out-of-state insurers when they issue insurance licenses.

Health Construction Picks Up in August

After a few months lagging behind other construction, health facilities starts finally showed some life in August (See Table I). Although on a twelve-month basis health facilities construction is still running slower than the booming construction market overall, health construction grew by 1.9 percent from July. Other construction grew by only 0.7 percent.

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