Thursday, December 31, 2015

Third-Party Bureaucracies Cannot Discipline Healthcare Prices

One of the least substantiated notions behind the modern American doctrine that people should allow insurers or governments to control our health spending is that these third parties can negotiate fees with hospitals and physicians that are better than those which would prevail if patients controlled these dollars ourselves.

Years of evidence show that these third parties have little idea what they are doing when they fix fees paid to providers.

Read the entire entry at the Independent Institute's Beacon blog.

French Doctors Lose Strike Against "Free" Health Care

After a long and arduous fight, French politicians have approved a law abolishing patients’ upfront payments to physicians, which was a promise of President Fran├žois Hollande’s Socialist Party.

Currently, patients usually pay about £23 ($25) when they see a general practitioner. However, some of this fee is reimbursed by the national health scheme or private supplemental insurance. I suppose the closest comparison to the United States would be Medicare and Medicare supplemental (Medigap) insurance.

The Socialist Party promised eliminating this co-pay would increase access to care. Remarkably, it is doctors who resisted.

Read the entire entry at the Independent Institute's Beacon blog.

Tuesday, December 29, 2015

Health Services Spending Continues To Grow Faster Than Gross Domestic Product

The third estimate of Gross Domestic Product for the third quarter indicates growth in health services spending is maintaining a disproportionate share of still slow GDP growth. Over the four quarters, growth in health services spending accounted for one fifth of GDP growth. This means that health services spending continues to devour more of our budgets.

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

Monday, December 28, 2015

Obamacare Beneficiaries' Bleak Future

One might be forgiven for thinking health insurers are cracking under the strain of Obamacare’s broken insurance exchanges. But don’t be fooled: it is the 10 million Obamacare enrollees who are in trouble, not the insurers.

To be sure, new nonprofit cooperative insurers, set up with special subsidies to compete in the exchanges, have had a terrible run. They deliberately underpriced their premiums to gain market share, expecting the federal government to bail out their losses. Once the Republicans took over the House of Representatives, then the Senate, this became unlikely. As a result, the administration announced in November that 12 of 23 nonprofit cooperative insurers were shutting down.

However, these nonprofit cooperative insurers, which did not exist before Obamacare, are not important overall. That is why UnitedHealth Group’s November 19 announcement that it is losing $500 million on the Obamacare exchanges and might withdraw from Obamacare in 2017 is a big deal. Just a few weeks earlier, UnitedHealth Group had announced it would expand into 11 new states’ Obamacare markets.

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

Friday, December 18, 2015

What is Driving Health Prices Up?

The recent arrest of Martin Shkreli, former CEO of Turing Pharmaceuticals, for securities fraud, reminds us that high prescription drug prices are today’s whipping boy for the costs of health care. Hillary Clinton and other politicians have promised to impose federal controls on pharmaceutical prices.

However, prescription drugs have not been the fastest growing item in health care since the economy started to enter the Great Recession in 2007. That distinction belongs to health insurance (specifically, medical and hospital insurance, not workers’ compensation, income replacement, or long-term care).

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

Congress Set to Deficit Fund Obamacare Almost $40 Billion

I had always feared that Congress’ alternative to Obamacare was deficit funded Obamacare, and it looks like that is coming to pass. This is being done through the so-called “taxibus”, a legislative package that combines popular “tax extenders” (items like research and development tax credits that are legally temporary but practically permanent) with funding the federal government through September 2016.

The bill proposes a couple of years delay in three Obamacare taxes: The medical-device excise tax, he health insurance fee, and the excise tax on high-cost employer benefit plans. All three taxes are bad. However, the bill just delays them without cutting any Obamacare spending.

Read more at NCPA's Health Policy Blog.

Wednesday, December 16, 2015

CPI: Hospitals Under Pressure as Physican Prices Rise

November’s Consumer Price Index (CPI) indicates health prices are moderating, though still increasing higher than non-heath consumer goods. In the third piece of bad news for hospitals (from their perspective, at least, after the Quarterly Services Survey and the Producer Price Index), prices for hospital services actually dropped.

However, physicians’ fees jumped significantly, by 1.1 percent on the month.

Read more at NCPA's Health Policy Blog.

Tomorrow! Health Technology Forum: DC - Financing Health Technology Ventures in the National Capital Area

We have three great speakers scheduled for tomorrow evening's Meetup of the Health Technology Forum: DC. The topic is "Financing Health Technology Ventures in the National Capital Area.

More info and RSVP at the Meetup site.

Trans-Pacific Partnership Deal Undercuts Biologic Invention

For want of a nail the shoe was lost; for want of a shoe the horse was lost; for want of a horse the battle was lost; for the failure of battle the kingdom was lost — All for the want of a horse-shoe nail.”

That proverb reflects what could be the fate of the Trans-Pacific Partnership, the multilateral trade agreement the United States and 11 other Pacific Rim countries recently signed after seven years of negotiation. What all of the countries have in common is a commitment to overcome domestic political obstacles to expanding free trade. Unfortunately, what U.S. negotiators appear to have agreed to in October is a final draft that might not pass Congress.

An important part of the deal is protection of intellectual property — including copyright, trademarks and patents — which are necessary for commercial and scientific innovation. The biggest obstacle to congressional approval, however, appears to be the deal’s inadequate protection of intellectual property in “biologic” medicines.

Read the entire op-ed at the Washington Examiner.

Tuesday, December 15, 2015

QSS: Dramatic Drop In Hospital Profitability in 3rd Quarter

The latest Quarterly Services Survey (QSS) showed a dramatic turnaround in hospitals’ fortunes. Quarterly revenues dropped two percent from the 2nd quarter, while offices of physicians and home health services grew over three percent (see Table I). Hospital revenue grew only 5.3 percent from 2014 Q3 to 2015 Q3, but that was still significantly lower than growth for most other health services.

For tax-exempt general medical and surgical hospitals (which comprise almost 90 percent of hospitals’ revenue), net revenue (revenue minus expenses) dropped from $390 to $207 per inpatient day, and net revenue per discharge dropped from $2,083 to $1,113.

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

PPI: Pharmaceutical Prices Finally Tame In November

November’s Producer Price Index (PPI) finally saw a slowdown in pharmaceutical price increases, which increased 0.3 percent, month on month. This was the same as the overall PPI increase. Price increases for health goods and services were very slight, compared to general PPI. Indeed, two categories (X-Ray & electromedical equipment and biological products including diagnostics) actually experienced price deflation.

Read more at NCPA's Health Policy Blog.

Friday, December 11, 2015

How Obamacare Crushes Working Class Job Opportunities

The Congressional Budget Office recently confirmed its estimate that Obamacare will shrink the workforce by 2 million full-time equivalent (FTE) jobs in 2025. When the CBO first published its (initially somewhat larger) estimate, in February 2014, it felt compelled to wriggle around the headline, claiming that it did not really mean what it said.

It is strictly true that some of this job loss will be “voluntary,” in that Obamacare’s subsidies will cause them to seek less work than otherwise. Those individuals will probably feel better off than if they had been laid off or fired. However, cutting back working hours because government subsidies encourage it is not quite the same as cutting back because you have changed your priorities – either economically or morally.

The new analysis allows us to see where the burden on employment lies – mostly on those eligible for tax credits in Obamacare’s exchanges. These are people who earn between 100 percent (or 138 percent, depending on the state) and 400 percent of the Federal Poverty Leve. For a family of four this ranges from $24,250 to $97,000 in 2016.

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

Wednesday, December 9, 2015

Connected Care Cuts Costs, But Can It Overcome Inertia?

“Connected care” refers to a large and growing portfolio of digital tools, from video consultations with psychiatrists to in-home sensors passively detecting when a senior falls to devices that measure diabetics’ blood glucose and send messages to their families’ or doctors’ smartphones when intervention might be needed.

Beyond Electronic Heatlh Records, uptake of connected health is very low. According to a recent report:

  • Less than half (45 percent) of patients receive even the traditional telephone appointment reminders.
  • Only one in five (21 percent) have access to online appointment scheduling with their doctors.
  • Fifteen percent use email to communicate with their provider.
  • Just 14 percent have 24/7 access to medical advice.
  • Fewer than one in ten (9 percent) receive reminders by text.
  • Only a small percentage (3 percent) are able to send a photo of a medical condition over email.
  • Just 2 percent have access to video visits.

Even more discouraging are physicians’ attitudes: Fewer than half believe telemedicine (delivering care over the phone or video) is an important evolution in the practice of medicine, while almost one third belief it is “not worth the hype.”

Read the entire column at Forbes.

Explaining The Fall (And Possible Rebirth) Of Doctors' House Calls

House calls used to make up 40 percent of U.S. doctors’ visits in the 1940s, before going into decline in the 1960s. These days, they comprise less than one percent of consultations. Many believe that more house calls would increase quality of care at low cost, which led Medicare to launch an “Independence at Home” demonstration project for seniors with multiple chronic conditions in 15 states. Starting in 2012, the project has had promising results.

This invites the question: Why did house calls decline?

Read the entire column at Forbes.

Tuesday, December 8, 2015

Why Are U.S. Prescription Drug Prices Higher Than Other Countries'?

Jeanne Whalen of the Wall Street Journal has written a feature article comparing U.S. prescription drug prices to those overseas. Unsurprisingly, she find prices in other developed countries lower, and credits government price controls in other countries with (pretty much) all the difference.

I do not dispute the facts of the article, but the article’s misidentifying the primary reason why drug prices are different.

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

Monday, December 7, 2015

Health Technology Forum: DC December 17 - Financing Health Technology Ventures - Third Speaker Announced

Our third speaker will be Steven Gravely, Partner at Troutman Sanders. Mr. Gravely will address an important risk entrepreneurs need to address when raising funding:

Under the Microscope: Cybersecurity and Funding

Health IT is attracting a lot of interest from Private Equity, Venture Capital and specialized lending.  Increasingly, these sources of funding are very focused on data privacy and security as part of their due diligence.

Driven by the explosion in data breaches, investors and lenders want to be sure that companies have implemented sound data privacy and cybersecurity programs. Mr. Gravely will discuss steps that companies should take now to be ready for this increased scrutiny.

Mr. Gravely joins our two previously announced speakers, Andy Richman and Pratik Patel.

More information and RSVP at the Health Technology Forum: DC Meetup group.

Friday, December 4, 2015

Hospitals Dominate Health Jobs in November

The November Employment Situation Summary came in as expected, with 211,000 nonfarm civilian jobs added. Last month’s report was dominated by health jobs, which was not the case today. The increase of 24,000 health jobs comprised only 11 percent of the payroll hike, and both health and non-health jobs rose by 15 percent on the month.

However, hospital jobs, which increased 13,000, comprised over half the growth in health jobs. This is something we view with concern.

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

Health Technology Forum: DC December 17 Meetup - Second Speaker Announced

Our next Meetup will address financing health IT ventures. According to Rock Health, $2.1 billion in funding was committed to digital health ventures in Q2 alone. Learn from and speak with experts in financing new health technology ventures.

Our second speaker will be Andy Richman, Partner at ProductSavvy and Managing Partner of Relevant Health. Relevant Health is the new accelerator in Bethesda, MD, which recently announced its first class of health tech startups. Mr. Richman will discuss: What's It Going to Take To Build The Health Tech Capital?

Mroe info and RSVP at the Meetup link.

Tuesday, December 1, 2015

Big Jump in Public Health Facilities Construction in October

After a significant drop in September, health construction starts increased significantly in October: A 1.3 percent increase versus a 1.0 percent increase for other construction starts (see Table I). On a twelve-month basis health facilities construction is still positive, but has been running slower than the booming non-health construction market: 6.1 percent versus 13.3 percent.

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

One in Five Doctors Say: "No New Medicare Patients"

If you learned that 93 percent of non-pediatric primary care physicians took Medicare patients and 94 percent took patients with private insurance, you would likely conclude that Medicare is doing just fine.

Unfortunately, such data do not describe physicians’ behavior at the margin, which is what will determine future access to Medicare. The Kaiser Family Foundation/Commonwealth Fund 2015 National Survey of Primary Care Providers also asks which physicians are not accepting new patients: 21 percent are not taking new Medicare patients and 14 percent are not taking new privately insured patients. That is, the proportion not taking new Medicare patients is 1.5 times greater than the proportion not taking new privately insured patients.

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