Health Status Related to Income Not Insurance

An extremely thorough analysis of changes in incomes and mortality in the United States, 2001 through 2014 presents some sobering conclusions for those who think fixing our health system will make us healthier. The research, let by Raj Chetty of Stanford University, ran data on incomes and mortality through a battery of statistical tools.

The latest research demonstrates how important incomes are to health status. Forty-year old men in households in the highest quartile of income (mean = $256,000 annually) had an average life expectancy just under 85 years in 2001. This increased by 0.20 years (a little over ten weeks) by 2014. For those in the lowest quartile ($17,000), life expectancy was about 76 years in 2001, and it only increased 0.08 years (a little over four weeks) by 2014.

Obamacare is likely to accelerate this gap, because it significantly reduces incentives for people in low-income households to increase their incomes.

Read more at NCPA's Health Policy Blog.

Flash GDP: Health Services Over One Third of Growth

This morning’s advance (flash) estimate of GDP for the first quarter (usually subject to significant future revision) showed very weak growth dominated by spending on health services. Health services spending of $19.5 billion (annualized) comprised over one third of GDP growth. However, there was shrinkage in personal consumption expenditures on goods, private domestic investment, and exports. This meant personal expenditures on services grew almost twice as much as GDP growth. Growth in spending on health services amounted to a little less than one fifth of growth in services spending. Nevertheless, the quarterly growth in spending on health services indicates health services continues to consume a disproportionate share of (low) growth.

Read more at NCPA's Health Policy Blog.

Happy World Intellectual Property Day!

Tuesday, April 26 is World Intellectual Property Day. Coordinated by the World Intellectual Property Organization (WIPO), World IP Day celebrates “the role that intellectual property rights (patents, trademarks, industrial designs, copyright) play in encouraging innovation and creativity.”

In health policy, we are mostly concerned with patents, which protect investment in innovation in medical technology, especially drugs and biologics. In honor of World IP Day, here are some of the publications I have written to make the case for good patent policy:

Read more at NCPA's Health Policy Blog.

Are Prescription Prices Becoming As Meaningless As Hospital Charges?

Professor Jack Hoadley of Georgetown University recently gave an excellent presentation discussing prices of prescription drugs. Two slides stand out. First, a slide showing how much prescription spending is controlled by insurers and governments versus patients directly. The second slide shows rebates given by drug makers to insurers in Medicare Part D, the prescription benefit that was launched in 2006.

Read more at NCPA's Health Policy Blog.

Health Reform Through Tax Credits

Lost in the blur of the presidential campaign is evidence that the Republican replacement for Obamacare will include refundable tax credits. In its purest form, this means that each person who has employer-sponsored benefits or an individual health plan, or is dependent on a welfare program like Medicaid or the Children’s Health Insurance Plan (CHIP), will start with a fixed sum of taxpayer money with which to choose health coverage. The Republican proposal will not likely go that far, but it will go a long way toward making the tax treatment of health benefits fair.

Read the entire op-ed at RealClearPolicy.

Administration Still Bailing Insurers Out of Obamacare Exchanges

The Obama Administration refuses to concede defeat in its struggle to save Obamacare’s exchanges. The exchanges lost one quarter of their members in 2015. The Blue Cross Blue Shield Association has reported its insurance plans have enrolled people significantly sicker (and more expensive) than anticipated. Finally, UnitedHealth Group, the nation’s largest insurer, will drop out of most of the exchanges in which it is participating.

Desperate to induce insurers to continue participating in exchanges, the Administration suggested it would make illegal payments from “risk corridors,” a risk-mitigation mechanism that moves money between insurers to stabilize their profits in Obamacare’s first three years. Republicans in Congress put a stop to that in 2014. So, the Administration proposes apparently illegal payments from another risk-mitigation fund, called “reinsurance."

Read more at NCPA's Health Policy Blog.

U.S. Health Spending Not An Economic Burden

Health spending consumes a higher share of output in the United States than in other countries. In 2013, it accounted for 17 percent of Gross Domestic Product. The next highest country was France, where health spending accounted for 12 percent of GDP. Critics of U.S. health care claim this shows the system is too expensive and a burden on our economy, demanding even more government intervention. This conclusion is misleading and leads to poor policy recommendations.

But compared to larger developed countries, Americans have higher income per capita after subtracting health care spending. For example, in the United Kingdom, GDP per capita after health spending was only $34,863 in 2013. So, even though Americans spent significantly more on health care than the British, 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.

Obamacare's Unintended Consequences: People Buy Short-Term Policies

Obamacare has driven individual health insurance premiums up so high people are forgoing comprehensive coverage in favor of short-term policies, according to the Wall Street Journal.

Such policies are appropriate for exchange students and other visitors to the U.S. However, they would not usually be an appropriate choice for permanent residents of the U.S.

Read more at NCPA's Health Policy Blog.

Consumer Price Index: Most Medical Prices Stall

The Consumer Price Index for March indicates that medical price inflation matched changes in other prices charged to consumers, with a slight uptick of 0.1 percent. Prescription drugs (0.5 percent increase), nursing homes and adult day care, eyeglasses, and health insurance (all with 0.4 percent increases) stood out as continuing to experience higher inflation than other items. Prices for many health goods and services actually dropped.

Read more at NCPA's Health Policy Blog.

PPI: Pharmaceutical Prices Up Amid Deflation

Deflation in the Producer Price Index (PPI) continued last month, as the PPI for final demand dropped 0.1 percent from February. Prices for final demand goods, less volatile food and energy, increased 0.2 percent. Most prices for health goods for final demand were flat. The exception – again – was pharmaceutical preparations, for which prices increased 0.4 percent.

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

Digital Health Funding Defies Expectations

Investors have not had their fill of digital health deals, according to new fundraising reports from Rock Health and Startup Health, two outfits which have led the digital health revolution and produce complementary reports on how much capital is flowing into the sector. While other sectors have wobbled recently, digital health (which was only defined as a market five or six years ago) continues to attract venture capital.

Read the entire column at Forbes.

Medicare Pays for Prevention - Finally

The Centers for Medicare & Medicare Services has announced Medicare (that is, taxpayers) will pay for lifestyle-intervention program that prevents type 2 diabetes.

The evidence supporting the intervention is compelling. So, why did it take so long to win coverage? The answer lies in perverse political incentives.

Read more at NCPA's Health Policy Blog.

Chicken & Egg in Consumer-Driven Health Care

An advocate of consumer-driven health care will often be challenged by this question: “So, when I am hit by a bus, or have a heart attack or stroke, or am suffering from dementia, you want me to go shopping around for medical care?”

Obviously not. Nevertheless, this is a serious challenge and invites the question: How much of our health spending can be meaningfully controlled by discriminating patients? Researchers at the Health Care Cost Institute (HCCI) recently addressed this. The HCCI has a unique advantage in producing such research, because has access to a database of claims for employer-based plans run by a number of insurers.

Read more at NCPA's Health Policy Blog.

Health Insurers Confirm Obamacare Death Spiral

The Blue Cross and Blue Shield Association, which represents 36 Blue Cross and Blue Shield plans covering 105 million Americans has released a study of its members’ claims data in Obamacare exchanges 2014 and 2015. It confirms Obamacare exchange enrollees are sicker and more expensive than enrollees in pre-Obamacare individual plans or employer-based plans.

Read more at NCPA's Health Policy Blog.

U.S Corporate Tax Code Unhealthy for Medical Innovation

It would be fair to say markets were blindsided by the U.S. Treasury’s 300-page plus batch of regulations that blew up the merger between Pfizer and Allergan. The deal was widely described as a so-called “inversion,” a deal whereby a U.S. domiciled company reverses itself in to a foreign firm for the purpose of reducing its U.S. tax burden.

Pfizer has been trying to invert itself for a long time. It has not been easy. In May 2014, Pfizer gave up its dance with AstraZeneca, a British-based global pharmaceutical company. The problem for a huge biopharmaceutical firm like Pfizer is that it cannot just collapse itself into a foreign shell.

Read the entire column at Forbes.

Trump's Health Reform Won't "Make America Great"

I recently wrote a blog entry on one plank in Donald Trump’s health reform plan: imposing foreign prices on medicines sold in the United States. As Mr. Trump is currently the leading Republican presidential candidate, it behooves us to examine his health plan overall.

Don’t worry: It won’t take long.

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

Health Jobs Grow Over Two Thirds Faster Than Other Jobs

Health jobs grew more than two thirds faster than non-health jobs in March. Health jobs comprised 37,000 (17 percent) of nonfarm civilian jobs added (215,000). The rate of growth from February was 0.24 percent for health jobs versus only 0.14 percent for non-health jobs.

Over the last twelve months, it looks like the workforce for elderly people is moving out of nursing homes and into home health and elderly community care.

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

Boomlet in Health Construction in February

Construction of new health facilities enjoyed a boomlet in February, growing 2.0 percent, while other construction shrank 0.6 percent.

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

Health Technology Forum: DC MeetUp April 7 Three Speakers Announced.

Our speaker line-up for the Health Technology Forum: DC on April 7 is finalized. Please join us in Penn Quarter, Washington, DC.

Read more and RSVP at our Meetup page.