GDP: Health Services Are 29 Percent of Growth

Today’s second release of Q4 GDP showed the production of goods actually shrank in the fourth quarter. As a result, the (annualized) $26 billion growth in health services spending accounted for 29 percent of GDP growth of $88.2 billion. It comprised 31 percent of services spending growth and 35 percent of growth in personal consumption expenditure.

This means that health services spending continues to devour more of our budgets. The evidence continues to indicate Obamacare is not bending the cost curve.

Read more at NCPA's Health Policy Blog.

Will Drug Companies' Price Firewall Melt?

A recent Kaiser Family Foundation Tracking Poll brings dire news for innovative drug companies: 83 percent of respondents favor a policy “allowing the federal government to negotiate drug prices for Medicare beneficiaries.” That includes 93 percent of Democrats and 74 percent of Republicans.

Despite dramatic headlines about pharmaceutical price increases, they have been in line with price increases for other health goods and services. Medicare payments to doctors and hospitals have been negotiated by government for over half a century, without containing costs.

Read more at NCPA's Health Policy Blog.

Opportunities for Health Care Savings in Obama's 2017 Budget

In a remarkable move breaching a four-decade precedent and characterized by many as a snub, the Republican chairmen of the House and Senate Budget Committees declined to invite the director of the Office of Management and Budget to present President Obama’s 2017 budget to their committees.

Utterly ignoring the president’s proposed budget is short-sighted, especially since congressional Republicans are disunited on fiscal issues. In January the Congressional Budget Office (CBO) updated its estimate of the cumulative federal deficit for the next 10 years to $8.5 trillion, versus just $7 billion last August. The reason for the increase is that Republicans, who control both chambers, have won some tax cuts but no spending cuts.

Read the entire op-ed at The Hill.

Fast Track to Nowhere? Biologic Intellectual Property in the Trans Pacific Partnership

The Trans-Pacific Partnership (TPP) trade agreement is in deep trouble. It has taken nine years to finalize this extremely important multilateral deal among the United States and 11 other countries. These countries — Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam — include developed nations with deep and rich trading ties to the United States, as well as emerging economies relatively new to global markets.

What they all shared was a commitment to try their best to overcome domestic political obstacles to expand the benefits of free trade. The TPP had bipartisan support in Congress. Unfortunately, President Obama did not push for adequate protection of intellectual property in biologic medicines, likely dooming the deal to failure in Congress.

Read the entire Brief Analysis here.

The Interstate Health Insurance Compact: An Idea Whose Time Has Come

House Speaker Paul Ryan has appointed six task forces, comprised of Congressional committee chairmen, to develop a governing agenda. One of those tax forces has a mandate to develop (finally) the Republican alternative to Obamacare.

Two of the members, Dr. Tom Price (Chairman of the Budget Committee) and Mr. Fred Upton (Chairman of the Energy & Commerce Committee) have already sponsored health reform bills that would replace Obamacare. Mr. Upton’s bill includes an interstate compact for health insurance.

An interstate compact is (effectively) a treaty between the states, which is approved by Congress. For health insurance, it would solve a dilemma for Republicans who want a national market for health insurance, without federal regulation of health insurance. The traditional approach to this is federal law compelling states to allow “selling health insurance across state lines.”

Read more at NCPA's Health Policy Blog.

Consumer Price Index: Health Insurance Premiums Jump

This morning’s Consumer Price Index showed a significant jump of 1.1 percent in health insurance premiums in January, versus a flat CPI for all items and a 0.3 percent rise in CPI for all items less food and energy. Prices for physician services increased only 0.1 percent, less than prices for other services.

This corroborates the Producer Price Index, which showed a slight decrease in physician prices. However, the divergence in price increases for prescription drugs in the CPI and PPI is continuing. Prescription prices in the CPI increased by only 0.5 percent, in line with medical care overall.

Further, over the past twelve months, price increases for health insurance and hospital services stand out significantly more than price increases for prescription drugs.

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

Increasing Medicaid Dependency Does Not Reduce "Uncompensated" Care

Robert Laszewski is a leading health insurance expert whom I often cite. However, in a recent article praising Ohio governor John Kasich he has made a serious error. Governor Kasich is one of only three Republican governors who took federal Obamacare money to expand Medicaid dependency. According to Mr. Laszewski:

On Medicaid, the Kasich administration helped 650,000 people whose uncovered health-care costs were being shifted onto and burdening employers and individuals struggling to pay their already-high health insurance costs. The administration enrolled them into a new Ohio Medicaid system that made 38 different reforms over five years. In 2015 alone, it saved Ohio taxpayers $1.9 billion compared with the original state-budget target. It held the program’s per capita cost growth below 3 percent while cutting the state’s uninsured rate in half.

The idea that people who cannot pay their hospitals bills are the major problem in driving American health costs is evidence-free.

Read more at NCPA's Health Policy Blog.

Producer Price Index: Physician Prices Pull Back

December’s surprising jump in physician prices looks to have been idiosyncratic. January’s Producer Price Index for physician services declined 0.6 percent, versus a 0.5 percent rise in prices of final demand services. Prices for home health and hospice care increased 0.7 percent on the month. However, other prices for final demand health services were in line with other services inflation.

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

Believer It or Not, The Republican Obamacare Replacement Plan Might Come Together

Earlier this month, Speaker Paul Ryan announced six task forces, each comprised of House Committee Chairmen, to develop a “bold, pro-growth agenda.” One of the task forces was on health care reform.

With respect to private health insurance, the composition of the task force indicates the emerging House Republican plan will improve the post-Obamacare health system not only versus Obamacare, but versus the pre-Obamacare system. One of the reforms will almost certainly be refundable tax credits to finance health care for those of us who do not have employer-based benefits.

Read the entire column at Forbes.

The Benefits of IP Protection

If there is one thing about which libertarians are never likely to agree, it is whether intellectual property – patents, copyrights, trademarks, and trade secrets – should receive the same legal protection as physical property.

Without wading too deep into the philosophical debate, but showing my colors as an IP advocate, let me share some new research published by the U.S. Chamber of Commerce’s Global Intellectual Property Center (GIPC) illustrating the benefits of legal protection of intellectual property.

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

Will Congress Fix its Electronic Health Records Fiasco?

There is some hope that Congress will fix – at least partially – the largely bungled Electronic Health Records (EHRs) deployment on which it spent $30 billion since 2009. Doctors are very frustrated by EHRS, which interfere with their practice of medicine. The current government program to have them installed nationwide should be abandoned.

Today, the Senate Health, Education, & Labor Committee marks up a number of bills to remove the regulatory burden in health care. One of them will address EHRs. Will it help? Maybe a little. First, it would force the federal government to reduce the administrative burdens associated with EHRs. Second, it would force the federal government to defer to the private sector on interoperability.

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

Are Section 1332 Waivers A Way Around Obamacare?

People are starting to get excited about another Obamacare work-around: The section 1332 waiver. This refers to a section of Obamacare that allows states great flexibility in how they deliver Obamacare within their borders. The curious thing about section 1332 waivers is that they can only be issued as of January 1, 2017.

Two interesting options that every state should consider: privatizing its health insurance exchange, and combining Medicaid and Obamacare tax credits into premium support.

Read more at the Independent Institute's Beacon Blog.

Huge Health Jobs Hike, Especially in Hospitals

This morning‘s tepid jobs report, the Employment Situation Summary, was dominated by health services, which added 37,000 jobs in January. That is just one percentage point shy of one quarter of all nonfarm civilian jobs added. Within health care, hospitals dominated, accounting for 24,000 of the 37,000 increase – almost two thirds. (This is interesting because there has been a slowdown in health construction starts. So, there must be a lot of slack in already built facilities.) Hospitals are generally inefficient locations of care, so the pickup in employment in January is actually of concern because it likely indicates more expensive care.

Read more at NCPA's Health Policy Blog.

GOP Congress' Budget Hits Reality Hard

The Congressional Budget Office's recent budget update revealed a dramatic deterioration in the federal government's finances. The cumulative deficit over the next ten years, through 2025, is now estimated to add up to $8.5 trillion. Just last August, the number was $7 trillion.

The CBO itself notes that "about half of the $1.5 trillion increase stems from the effects of laws enacted since August." In other words, this is the work of the 114th Congress, in which Republicans hold the majority in both chambers for the first time in the Obama presidency.

Republican apologists assert that Congress' powers to shrink the government are limited as long as President Obama is in office. This is true. So, let's see where Congress can go from here.

Read the entire op-ed at Real Clear Policy.

Is Health Inflation Really Quite Tame?

I sometimes feel the odd man out when addressing inflation in U.S. health care. I discuss the monthly Consumer Price Index and Producer Price Index releases, as well as other monthly and quarterly economic releases that include health spending. I have suggested health inflation is stirring, which is counter to respected scholars like Chris Conover of Duke University and those at the Altarum Institute, the “go to” source for analysis of health inflation.

However, I seem to be siding with ordinary Americans, who are struggling as much as they ever did to pay medical bills. I expect people still struggle because, although inflation in health goods and services is low by historical standards, it is high relative to general inflation faced by consumers.

Read more at NCPA's Health Policy Blog.

Health Construction Collapses in December

Construction of new health facilities collapsed in December, shrinking 3.2 percent since November, while other construction eked out growth of 0.2 percent. Over the last twelve months, health facilities construction starts have lagged other construction significantly. This suggests health systems are pessimistic about their ability to extract further revenue from the system.

Read more at NCPA's Health Policy Blog.

Ted Cruz and Health Reform

Senator Ted Cruz has won the Iowa Republican caucuses. Over the weekend, Chris Wallace of Fox News challenged Senator Ted Cruz on his proposal “to sell health insurance across state lines,” citing research published by NCPA that concludes federal action to mandate this would be ineffective. The research in question is on this blog, here and here.

We got quite a bit of feedback yesterday on this topic. As a think tank, we endorse policies, not politicians. Nevertheless, some of our audience took Mr. Wallace’s question to reflect opposition to Senator Cruz.

In fact, Senator Cruz’ proposal to sell health insurance across state lines does not appear in his presidential campaign platform. It is in a Senate bill he proposed last March, in anticipation of the Supreme Court’s decision in King v. Burwell.

Read more at NCPA's Health Policy Blog.

Obamacare Premium Hikes Are Much Bigger Than You've Been Told

Yesterday was the last date for open enrollment in Obamacare’s third season. Since October, at least six independent and credible sources have confirmed rate increases will be in the double digits. However, these are gross premium hikes. Net premium hikes paid by enrollees are distorted by tax credits paid to insurers.

These badly designed tax credits have a number of perverse consequences. They are so badly designed that they impose a ratchet effect causing net premium hikes greater than the gross premium hikes. According to new research published by the National Center for Policy Analysis, this effect is concentrated among Obamacare enrollees in the lowest income brackets.

Read the entire column at Forbes.