tag:blogger.com,1999:blog-20471955734240441762024-03-05T15:38:37.599-08:00JRG Health & Human Services Policy UpdateResearch and commentary from a former senior executive in the U.S. Department of Health & Human ServicesJohn R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.comBlogger1501125tag:blogger.com,1999:blog-2047195573424044176.post-14093062221381997652021-10-05T07:11:00.001-07:002021-10-05T07:11:23.713-07:00Putting Patients First: Innovative Solutions for Prescription Drugs & Older AmericansU.S. Senator Tim Scott, Ranking Member of the Senate Special Committee on Aging, has published a report exploring the consequences of Democrats' prescription drug price control policies; which include long-term drug shortages (an almost 50 percent decline in access to medicines); shattered innovation (a 50-90 percent decline in new medicines); and bankrupt businesses (an economic loss in the trillions of dollars).<div><br /></div><div>The report also describes four policy options to reduce lower prices and expand access to treatment. Read more <a href="https://www.aging.senate.gov/imo/media/doc/Putting_Patients_First_10_2021.pdf" target="_blank">at this link</a>.</div>John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-36741600991273610172021-06-18T05:59:00.004-07:002021-08-14T11:02:40.671-07:00Senate Aging Committee Ranking Member Scott Proposes Reforms to Long-Term Caregiving<p>In conjunction with yesterday’s U.S. Senate Special Committee on Aging hearing on “21st Century Caregiving: Supporting Workers, Family Caregivers, Seniors and People with Disabilities”, Ranking Member Tim Scott (R-S.C.) released a report titled “Expanding Opportunities for Older Americans: Self-Directed Home & Community Based Services.”</p><p>The report highlights the inadequate and disastrous policies proposed by the Biden administration and offers a better path forward where caregivers and recipients are empowered to make informed decisions about the services they want and need.</p><p>“Caregiving is a deeply personal issue, and policymakers have an obligation to get it right. Bold reform can boost seniors’ quality of life, support caregivers, and tackle new challenges.” said Ranking Member Tim Scott. “However, pushing $400 billion into an inflated and unaccountable program misses the mark for productive reform.”</p><p>The <i>Expanding Opportunities for Older Americans</i> report finds that:</p><p>The federal government has increased spending on caregiving in recent decades. In 1981, Medicaid spending on Home & Community Based Services (HCBS) accounted for only 1% of Medicaid spending on Long-Term Services & Supports (LTSS). By 2016, it reached 57%. The American Rescue Plan strongly incentivized states to increase Medicaid spending overall and to spend more of that money on HCBS. Yet sharp rises in HCBS spending have not reduced care costs over time. Medicaid still spends slightly more on institutional care than on HCBS for older Americans and people with physical disabilities.</p><p>The Biden administration and its partners in Congress should instead adopt a sustainable funding mechanism that supports alternative models, including the National Family Caregiver Support Program. Federal resources should empower patients and families as informed consumers making their own choices, and financial assistance should improve conditions for caregivers while enhancing service quality.</p><p>An effective alternative to the administration's proposal would bolster this initiative and similar programs, empowering older Americans and their caregivers to manage their budgets while building on the success of self-direction in innovative state responses to caregiving challenges.</p><p>For example, in South Carolina, the Department on Aging has instituted a robust system of caregiver assessment, which looks at a family caregiver's needs, strengths, resources, and ability to care for a loved one. This approach has sparked the growth of care providers with deep roots in S.C. communities. The state’s approach has resulted in a successful environment for care services. By doing so, South Carolina ranks 7th in the country in an AARP scorecard for the fewest number of people in nursing homes whose needs could be met with HCBS. It is 8th in the country for successfully discharging Medicare beneficiaries into the community from post-acute care.</p><p>Click <a href="https://www.aging.senate.gov/imo/media/doc/HCBS%20Report%20FINAL.pdf">HERE</a> to view full report. </p>John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-59964154591095816512021-03-08T16:38:00.004-08:002021-10-05T07:11:49.991-07:00Career Announcement and Status Update<p>Colleagues & Supporters,</p><p>I am excited to announce I have joined the U.S. Senate Special Committee on Aging as the Senior Professional Staff Member on the Republican staff. I look forward to serving under our new Ranking Member, U.S. Senator Tim Scott (SC), and a great new staff team, to advance the health care and human services delivered to older Americans.</p><p>Please follow @SenateAgingGOP on Twitter and our hearings at <a href="http://aging.senate.gov">aging.senate.gov</a>.</p>John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-23827793616051959912021-01-28T15:36:00.003-08:002021-02-01T11:56:12.114-08:00JRG Health & Human Services is Back in Business!<p>Welcome to the first new blog entry since March, 2017. What have I been doing all these years? Well, it is quite a story......</p><p>I left the U.S. Department of Health & Human Services on January 20 after almost four years in two positions.</p><p>In March 2017, Secretary Dr. Tom Price hired me as Acting Assistant Secretary for Planning & Evaluation (ASPE). Later in the term I transferred to be Regional Director of Region 10, the only HHS presidential appointee in the region (Washington, Oregon, Idaho, Alaska).</p><p>During my time in HHS, I was responsible for either policy development (while at ASPE) or stakeholder engagement (while Regional Director) for the entire portfolio of HHS programs.</p><p>This was a fairly unique experience because most presidential personnel are otherwise assigned to one component of the Department, e.g. Centers for Medicare & Medicaid Services or Food and Drug Administration or Agency for Children and Families.</p><p>My understanding of American health and human services has become more integrated as a result of this experience. What is next? Well, not the pace of research output you were used to in the old days.</p><p>As it states on my LinkedIn profile, I am "seeking work at the intersection of healthcare finance, innovation, public policy, and government affairs." While I pursue employment opportunities, my time for writing will be less than it was. Updates will be more monthly than weekly.</p><p>Nevertheless, I will do some research and writing. Thank you for waiting!</p>John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-38594710405820991542017-03-28T04:00:00.000-07:002017-03-28T04:00:21.118-07:00Time Out From Writing and Speaking<div class="MsoNormal">
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<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">It has been a great pleasure and privilege
to participate in the discussion of U.S. health reform as an independent
analyst. Due to other obligations, I will no longer be writing and speaking
publicly in this capacity. Nor will I be responding to media inquiries.<o:p></o:p></span></div>
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<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">This blog and other communications outlets
are suspended indefinitely. <o:p></o:p></span></div>
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<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">Thank you for your support, readership,
and input.</span><br />
<span style="font-family: "times new roman" , serif; font-size: 14pt;"><br /></span>
<span style="font-family: "times new roman" , serif; font-size: 14pt;">Best wishes.</span></div>
</div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-32976774450787362772017-03-27T12:52:00.003-07:002018-03-02T13:08:27.678-08:00Health Technology Forum: DC Meetup April 11 First Speaker Announced<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Our next Meetup will be on April 11. We
will discuss the promise of the recently passed 21st Century Cures Act (which
was the last bill President Obama signed).<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">21st Century cures implemented a wide
variety of provisions across drugs, devices, and other medical specialties
aimed improving patient care through foster innovation.</span></div>
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<span style="font-family: "Times New Roman", serif; font-size: 18.6667px;">Our first speaker is </span><a href="https://www.linkedin.com/in/diane-johnson-140b8017/" style="font-family: "Times New Roman", serif; font-size: 18.6667px;">Diane Johnson</a><span style="font-family: "Times New Roman", serif; font-size: 18.6667px;"> of </span><a href="https://www.jnj.com/" style="font-family: "Times New Roman", serif; font-size: 18.6667px;">Johnson & Johnson</a><span style="font-family: "Times New Roman", serif; font-size: 18.6667px;">. Ms Johnson currently serves as Senior Director, Strategic Regulatory, Medical Devices & Diagnostics. She will focus on combination products, accessories, class I and II exemptions, advisory panels, Humanitarian devices and clinical trials.</span></div>
<a name='more'></a><br />
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<span style="font-family: "Times New Roman", serif; font-size: 14pt;">Primary titles
include innovation, development and delivery. This evening she will
discuss some of the medical device provisions and high level provisions that
will foster improved patient outcomes. </span></div>
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<br /></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">More speakers will be announced in the
coming days. <a href="https://www.meetup.com/HealthTechnologyForum-DC/?scroll=true">Learn more, join , and RSVP at this link</a>.</span><o:p></o:p></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-88770057101351932772017-03-27T09:16:00.002-07:002018-03-02T13:08:28.234-08:00Third-Party Payment Is the Root Cause of Health System Dysfunction<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">(A version of this column was published by
<i><a href="http://www.realclearhealth.com/articles/2017/03/27/the_root_cause_of_health_care_dysfunction_110514.html">RealClearHealth</a></i>.)<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Largely absent from the vigorous debate
over reforming the nation’s health care laws is the understanding that simply
being covered by health insurance does not reduce health care costs.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Before the Affordable Care Act (ACA)
passed in March 2010, President Obama <a href="https://www.youtube.com/watch?v=66bgpRRSDD4">repeatedly promise</a>d that
the typical family’s health premiums would go down by (sometimes “up to” but
frequently “on average”) $2,500. That decline did not occur because the ACA
strengthened the control that insurance companies—as opposed to patients—have
over health care spending. In fact, Americans’ increasing dependence on health
insurance over the last seven decades has been a major contributor to exploding
health costs.</span></div>
<a name='more'></a><o:p></o:p><br />
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<span style="font-family: "Times New Roman", serif; font-size: 14pt;">It’s a fundamental economic truth that too
much health insurance actually increases costs. That is why other types of
insurance—think of car accidents or warehouse fires—only cover catastrophic
costs. The full cost impact of our over reliance on health insurance, provided
by both government and private insurers, is staggering.</span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">In 2014, real health spending per person
was $9,532. However, if government policy had not encouraged control of health
spending to shift from patients to governments and insurers, spending would
have been about $4,316 per person—less than half of what we actually spend.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">The difference is explained by waste,
fraud, and abuse that quickly finds its way into markets controlled by
third-party payers, who then impose costs to try to control these problems. <o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">If a politician promised to reduce the
cost of driving by forcing auto insurers to pay for our cars, gasoline, tires,
engine oil, windshield-wiper fluid, and all the other items and services we
need to be on the road, we would all understand why our premiums would
skyrocket—because those added costs would have to be accounted for.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">And that’s just the beginning. Since
drivers would not pay for our cars directly, we wouldn’t be careful about how
we managed their costs. We wouldn’t search for cheaper gas or efficient
mechanics, or care whether a more expensive tire was really worth it. We’d go
to Maserati dealers for their latest model without worrying about how to
finance the purchase, and simply tell the salesperson which insurer to
bill. <o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Obviously, auto insurers would respond the
same way health insurers have: Build networks of dealers, gas stations, and
mechanics; and impose all kinds of rules and bureaucracies between them and
drivers. However, because insurers are removed from drivers’ experiences, those
rules would be ineffective—just like they have proved in health care.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">In 1999 and 2001, the Institute of
Medicine at the National Academies of Science published two scathing reports on
health quality. The first <a href="http://www.nationalacademies.org/hmd/~/media/Files/Report%20Files/1999/To-Err-is-Human/To%20Err%20is%20Human%201999%20%20report%20brief.pdf">concluded</a> that
tens of thousands of patients died in hospitals unnecessarily.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">The second <a href="http://www.nationalacademies.org/hmd/~/media/Files/Report%20Files/2001/Crossing-the-Quality-Chasm/Quality%20Chasm%202001%20%20report%20brief.pdf">recommended</a> principles
to guide the health system across the so-called “quality chasm.” It noted
payment was an important factor in improving quality, and that “even among
health professionals motivated to provide the best care possible, the structure
of payment incentives may not facilitate the actions needed to systematically
improve the quality of care, and may even prevent such actions.”<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">A decade later, the institute published an
equally disturbing <a href="https://www.ncbi.nlm.nih.gov/books/NBK53920/">825-page
repor</a><a href="https://www.ncbi.nlm.nih.gov/books/NBK53920/">t</a> on
waste. Experts convened by the institute concluded that $765 billion (31
percent) of the $2.5 trillion spent on U.S. health care that year was wasted.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Clearly, the rules and bureaucracies
imposed by third-party payers are not improving our health care or making it
more affordable. However, control by third-party payers is not some law of
nature. It is the result of deliberate policies that can be amended or
reversed.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">As recently as 1960, just under half of
health spending was controlled directly by patients. Because the costs paid by
insurers were mostly related to hospitalization; That meant many families that
needed only primary care went for years without ever processing a claim through
a health insurer. Nevertheless, they had access to doctors. <o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Today, only 11 percent of health spending
is controlled directly by patients, but solutions are at hand. Among the
privately insured, the dominance of third-party payers is the consequence of
decades-old tax policy that allowed medical spending covered by insurers to be
excluded from taxable income, while direct spending was taxable income. This
was fixed somewhat through Health Savings Accounts, which came into being in
2005 and allows beneficiaries to spend pre-tax dollars directly on medical
care. Similar mechanisms could be used in Medicare, Medicaid, and other
government programs to reduce costs.</span></div>
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<span style="font-family: "Times New Roman", serif; font-size: 14pt;"><br /></span></div>
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<span style="font-family: "Times New Roman", serif; font-size: 14pt;">We need to do more than repeal and replace
the ACA. We need to repeal insurers’ and governments’ control over our health
spending and replace it with a payment system controlled directly by patients.</span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-24997697663028090072017-03-27T08:41:00.002-07:002018-03-02T13:08:27.549-08:00The Unindicted Conspirator: High Healthcare Spending and the Rise of Third-Party Payment <div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">The healthcare sector has come to be
dominated by third-party payers. Insurance companies and government
bureaucracies pay the bills for the medical care that Americans consume, and
they have become an unquestioned fixture of the healthcare landscape.
Meanwhile, the growth in third-party payment has coincided with a massive
increase in healthcare costs and a decline in quality.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Read my new research paper, published by
The Mercatus Institute at George Mason University, <a href="https://www.mercatus.org/publications/healthcare-spending-third-party-payment">at this link</a>.<o:p></o:p></span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-58570991605124555922017-03-27T08:17:00.000-07:002018-03-02T13:08:27.806-08:00Average Wait Time to See A Physician Up 30 Percent in Three Years<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Merritt Hawkins, a physician-staffing firm
has published its periodic <a href="https://www.merritthawkins.com/uploadedFiles/MerrittHawkins/Pdf/mha2017waittimesurveyPDF.pdf">survey</a>
of waiting times for appointments with physicians in 30 metropolitan markets.
The results:<o:p></o:p></span></div>
<blockquote class="tr_bq" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Average new patient physician appointment
wait times have increased significantly. The average wait time for a physician
appointment for the 15 large metro markets surveyed is 24.1 days, up 30% from
2014.</span> </blockquote>
<blockquote class="tr_bq" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Appointment wait times are longer in
mid-sized metro markets than in large metro markets. The average wait time for
a new patient physician appointment in all 15 mid-sized markets is 32 days,
32.8% higher than the average for large metro markets.<a name='more'></a></span></blockquote>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;">Of the 15 major markets surveyed, Boston
has the longest waiting time (52.4 days) while Dallas has the shortest (14.8
days). This is not surprising because queuing is a symptom of a system where
resources are allocated by central planners exercising government privilege.
Massachusetts has long been at the forefront of efforts to guarantee universal
access to care through government planning, whereas Texas has no interest in
such a program.</span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Of the 15 major markets surveyed, slightly
more than half of the physicians (53.0 percent) reported they accept patients
on Medicaid, the joint state-federal welfare program for low-income residents.
This is an “improvement,” of sorts, from 2004, when only 49.9 percent of
physicians accepted Medicaid patients.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">However, 84.5 percent of physicians
accepted patients on Medicare, the federal program for seniors, an increase
from 77.0 percent in 2014. It is not clear why this changed. Although, given
the dramatic increase in waiting times, it is not clear the increased rate of
Medicare acceptance signifies overall improvement.</span></div>
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<span style="font-family: "Times New Roman", serif; font-size: 14pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;">Obamacare significantly increased federal
control of patients access to medical care, and it appears to be having the
impact we would expect from more central planning.</span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-63851733544748612022017-03-23T09:58:00.003-07:002018-03-02T13:08:27.849-08:00California Single-Payer Bill Looks Backward, Not Towards A New Era of Patient Choice<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">(A version of this Health Alert was
published by the <i><a href="http://www.ocregister.com/articles/health-747323-california-state.html">Orange
County Register</a></i>.)<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Here we go again. The California state
legislature is considering yet another bill to impose a so-called single-payer,
government monopoly, health care system. This has long been an obsession of the
militant California Nurses Union, because a health system under total
government control would suit the narrow interests of union leaders. They would
accrue power similar to that wielded by other public-sector unions and might
even be able to negotiate contracts similar to those enjoyed by state and local
employees, which are driving public finances across the state into the ditch.</span></div>
<a name='more'></a><o:p></o:p><br />
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;">However, a government take-over would not
be good for Californian patients. The single-payer ideology overwhelmed
Canadian health care decades ago, where militant unions invest significant
resources in preventing reforms patients need to improve their access to health
services. Our Northern neighbors suffer unacceptable delays in getting medically
necessary treatment. According to a 2016 study by The Fraser Institute, it took
an average of 20 weeks for a patient to receive treatment from a specialist
after referral by a primary-care doctor. This has deteriorated significantly from
9.3 weeks in 1993, the first year the study was published. The worst delay is
for neurosurgery, for which the average wait was 46.9 weeks last year.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">And those waiting times are after a
patient’s primary-care doctor refers her to a specialist. However, about one in
seven Canadians does not even have a family doctor! Access to lifesaving
medicines is similarly poor. According to a recently published study conducted
by researchers at the University of Pittsburgh, the U.S. Food and Drug
Administration approved 45 anticancer drugs from 2009 through 2013, while only
34 were approved in Canada. While Medicare covered all 45 drugs, government
programs in Canada covered only 15.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">California’s single-payer advocates argue
government monopoly would be “Medicare for all,” but that is not the case. Medicare
beneficiaries do not (yet) suffer limited access to specialists because it is
paid for by working-age people who finance Medicare’s spending on people aged
65 and older. As the baby boomers retire, this financing mechanism will fail
and more Americans will recognize the need for significant reforms to Medicare.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Medicare Part D, which covers prescription
drugs, is offered by private insurers which submit bids to the federal
government for the privilege of offering the benefit to Medicare beneficiaries.
This element of competition protects seniors from direct government rationing
of innovative new medicines. It would disappear under California’s single-payer
proposal.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Economic growth in California would also
suffer, because investment in medical innovation flees when government rations
patients’ access to new therapies. According to another Fraser Institute study,
investment in pharmaceutical research and development in Canada shrank 20
percent between 2001 and 2015. In California, on the other hand, the life
sciences industry has grown so dramatically it employs more workers than
traditional California industries such as aerospace, electronic-equipment
manufacturing, or telecommunications, according to a 2014 report by
PriceWaterhouseCoopers. Many of these high-paying jobs would disappear if
California adopted a single-payer system.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">A single-payer health system would not
look like “Medicare for all,” but Medi-Cal, the state’s welfare program for
low-income residents’ health care. A 2013 study found only 54 percent of
office-based physicians accepted Medi-Cal patients. Another found only 36
percent of psychiatrists would accept Medi-Cal patients.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Rewarding failure, Obamacare increased
federal funds to enroll newly eligible people in state Medicaid programs, which
has resulted in almost one third of California’s 39 million people becoming
dependent on Medi-Cal. The number increased from 7.8 million in 2013 to 12.1
million last November. However, the federal handouts are not free. In his 2016-2017
budget, Governor Brown asked for an eight percent increase in Medi-Cal funding
from 2015-2016. This $19.1 billion would cover a caseload now estimated at 13.5
million people.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">This bloated Medi-Cal program is living on
borrowed time. The new President and Congress have pledged to repeal and
replace Obamacare with a health reform that will give states more flexibility
in how they deliver Medicaid to low-income households. </span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">This will include a cut
in federal payments, but also unprecedented options to explore better ways to
deliver care to the least advantaged patients with less bureaucracy. One
example is Health Opportunity Accounts, which would allow Medi-Cal patients
themselves to decide which health services should be paid for.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;">Instead of wasting time fantasizing about
imposing a single-payer government monopoly over Californians’ access to health
care, California’s politicians should look forward to taking advantage of these
new ways to deliver care within reasonable budget constraints.</span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-56976620681033826032017-03-21T11:32:00.004-07:002018-03-02T13:08:27.764-08:00Whither Goes Your Health Insurance Premium?<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;">AHIP, the trade association for health
insurers, has a nifty </span><a href="https://ahip.org/health-care-dollar/" style="font-family: "Times New Roman", serif; font-size: 14pt;">infographic</a><span style="font-family: "Times New Roman", serif; font-size: 14pt;">
answering the question: “Where does your premium dollar go?”</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Obviously designed to defray accusations
that health insurers earn too much profit, the infographic shows “net margin:
of only three percent. A full 80 percent of our premium dollar goes to paying
medical, hospital, and prescription claims.”<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Fair enough. However, the elephant in the
infographic is the 18 percent of premium that goes to “operating costs.” Lest
you think that’s a synonym for “overhead” or “bureaucracy,” AHIP helpfully
explains: “Operating costs include consumer-centric activities such as
communicating with members, running customer service operations, quality
reviews, and data analysis, among other activities.”<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Well, readers have to judge how
“consumer-centric” those operations are.</span></div>
<a name='more'></a> <o:p></o:p><br />
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;">In 2015, average premium for a single
worker in an employer-based plan was </span><a href="http://kff.org/report-section/ehbs-2015-summary-of-findings/" style="font-family: "Times New Roman", serif; font-size: 14pt;">$6,251</a><span style="font-family: "Times New Roman", serif; font-size: 14pt;">.
So, $1,125 of that contributed to the insurer’s “operating costs.” How much
health spending did the average insured person in an employer-based plan incur?
</span><a href="http://www.healthcostinstitute.org/wp-content/uploads/2016/12/2015-HCCUR-11.22.16.pdf" style="font-family: "Times New Roman", serif; font-size: 14pt;">$5,141,
of which $813 was out of pocket</a><span style="font-family: "Times New Roman", serif; font-size: 14pt;">. In other words, insurers’ “operating
costs” added 22 percent to actual spending on health care.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Let’s compare this to auto insurance. For
a sedan, <a href="http://newsroom.aaa.com/auto/your-driving-costs/">annual cost
of ownership</a> amounts to $8,558 for a sedan, including $1,222 insurance. So, operating costs (excluding insurance
premium) are $7,336 – 43 percent more than average annual health spending for
someone in an employer-based plan. Yet, the <i>entire
premium</i> of auto insurance is less than the <i>operating cost </i>buried in the premium of health insurance!<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Another way to look at it: About 25
percent of the premium of auto insurance covers operating costs (see <a href="http://www.carinsuranceguidebook.com/where-your-auto-insurance-premium-dollar-goes/">here</a>
and <a href="https://www.fool.com/investing/general/2015/02/23/insurance-industry-basics-combined-ratio.aspx">here</a>).
That would be $305 for a sedan – a mere four percent of the operating costs.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;">The reason? We do not expect auto
insurance to cover almost every penny of spending we incur every year to run
our cars. If only that were true of health insurance.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;">The real issue is not where our health
insurance premium dollars go, but how much of our health dollars go to
premiums.</span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-1201028882553508502017-03-20T11:42:00.003-07:002018-03-02T13:08:27.249-08:00Veterans Health Administration Realizes It Should Buy, Not Build Software<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14pt;">Imagine if you learned a government agency
built its own office furniture, HVAC, or telephones. Even if there were a
massive amount of corruption in government purchasing, it would be remarkable
if a bureaucracy could do a better job building than buying.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">
<br />
Yet, for decades, the Veterans Health Administration has tried to do that with
its Electronic Health Record (EHR). I cannot think of another health system
that has built its own EHR, rather than buy it from a vendor. It makes as
little sense as a health system manufacturing its own MRI machines.</span></div>
<a name='more'></a><br />
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14pt;">President Trump's newly appointed VA Secretary has </span><a href="http://www.fiercehealthcare.com/ehr/shulkin-confirms-va-will-transition-to-commercial-ehr" style="font-family: "Times New Roman", serif; font-size: 14pt;">confirmed</a><span style="font-family: "times new roman" , serif; font-size: 14pt;">
he will throw in the towel on the VA’s home-brew system, VISTA, and buy a
commercial EHR.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">Back in 2014, the VA and Department of
Defense scrubbed a failed project to make their EHRs interoperable – after <a href="http://blog.independent.org/2014/03/06/va-and-defense-dept-electronic-medical-records-cant-talk-to-each-other-29-billion-fix-already-abandoned/">churning
through $24 billion</a> of taxpayers’ money in a vain attempt to overcome turf
wars between and within the departments.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">The reason it took so long for the VA to
take this step is the VISTA EHR was cutting edge in the late 1990s. At the
time, the installation was led by an idiosyncratically outstanding leader, <a href="https://books.google.com/books?id=srPFAwAAQBAJ&pg=PA230&lpg=PA230&dq=ken+kizer+vista&source=bl&ots=7p3z4nT8Wc&sig=tNHVPZF9Nf6yPwqn8OIHANB3alM&hl=en&sa=X&ved=0ahUKEwi9jf3sx97SAhXI4CYKHXGxCqsQ6AEIRDAI#v=onepage&q=ken%20kizer%20vista&f=false">Dr.
Ken Kizer</a>, from 1994 to 1999. Then, he went to the private sector.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14pt;">VISTA began to track towards obsolescence
pretty quickly. However, absent market forces, the VA could not make an effective
“build or buy” decision for almost two decades.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14pt;">Buying a commercial EHR will not solve the
VA’s crisis, but least it is a sensible step. </span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-70490957497506093072017-03-17T18:58:00.000-07:002018-03-02T13:08:27.934-08:00The Logic Defying CBO Obamacare Replacement Score Breaks Its Own Rules<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman", serif; font-size: 14pt;">(A version of this column was
published by </span><a href="https://www.forbes.com/sites/theapothecary/2017/03/17/the-logic-defying-cbo-obamacare-replacement-score-breaks-its-own-rules-among-other-problems/#2946a975406c" style="font-family: "times new roman", serif; font-size: 14pt;"><i>Forbes</i>.com</a><span style="font-family: "times new roman", serif; font-size: 14pt;">)</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">Dr. Tom Price, the U.S. Secretary of
Health & Human Services has said the Congressional Budget Office’s recent “<a href="https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/americanhealthcareact.pdf">score</a>”
of the Republican Obamacare replacement bill <a href="https://www.hhs.gov/about/news/2017/03/14/secretary-price-statement-cbo-report.html">defies
logic</a>. Even worse, it defies the very rules which govern the CBO.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">The 2016 Budget Resolution, agreed by both
the House and Senate in May 2015 directed the CBO to do so-called <a href="https://www.cbo.gov/publication/50730">dynamic scoring</a> of major
legislation. Dynamic scoring includes
proposed laws’ macroeconomic effects. It is especially important when new laws
cut taxes, as the American Health Care Act would do. Old fashioned, static analysis
does not result in accurate estimates.</span></div>
<a name='more'></a><o:p></o:p><br />
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14pt;">For example, say a 10 percent tax on a
base of $100 million raises $10 million. Cutting that tax to five percent would
cut revenue by $5 million, under static analysis. This ignores the economic
growth that would occur as a result of the tax cut.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">The AHCA eliminates almost all of
Obamacare’s taxes. Even according to the CBO’s static analysis, the bill will
reduce the federal deficit by $337 billion over 10 years. This combines a
spending cut of $1.2 trillion and a cut in tax revenue of $0.9 trillion.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">This effect on the federal government
disguises the reform’s benefits to real people. </span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">The CBO claims it did not have
enough time to prepare a dynamic analysis. Fortunately, the <a href="http://www.ncpa.org/pub/the-economic-effects-of-repealing-the-affordable-care-act">National
Center for Policy Analysis</a> has just done so. The analysis concludes the
AHCA would increase real Gross Domestic Product by $426 billion, or 1.5
percent; increase private sector employment by 940,000, or 0.49 percent; and
increase personal income by $185 billion, or 0.76 percent.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">Critics of the bill focus on the increase
in the number of uninsured Americans who will lose coverage under the AHCA. The
media tried to instill panic by highlighting the estimate of 24 million losing
coverage by 2024. This is inaccurate because only 10 million will lose actual
health insurance. The other 14 million will lose access to the welfare program
called Medicaid, which provides <a href="https://www.forbes.com/sites/theapothecary/2014/10/16/mars-and-venus-on-medicaid/#3cdf0f4644ee">poor
access to care</a> and results in surges of visits to <a href="https://www.forbes.com/sites/theapothecary/2016/10/20/medicaid-expansion-causes-surge-in-er-visits/#7e8be823f0f2">hospitals’
emergency departments</a>.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">The CBO’s crude numbers ignore the
fundamental change in how Congress will finance Medicaid. Instead of just
handing money over to states according to a formula that promotes fiscal insolvency,
states will receive fixed funding and be freer to innovate how they deliver
health care. Medicaid reform is on a path to replicate the success of other
welfare reform passed in 1996, <a href="https://www.brookings.edu/articles/welfare-reform-success-or-failure-it-worked/">which
put millions back to work</a>.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">The estimate of 10 million losing actual
insurance is also off-base, because it includes seven million estimated to lose
employer-based coverage, versus under Obamacare. </span><span style="font-family: "times new roman" , serif; font-size: 14pt;">This is unrealistic because
the AHCA will promote economic growth, while Obamacare has stifled it. The GOP
reform will lead to more jobs with health benefits.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">One way Obamacare stifles growth is the
structure of its tax credits, which impose <a href="https://www.forbes.com/sites/theapothecary/2015/06/24/king-v-burwell-fix-obamacares-job-killing-tax-credits/#2ea82c9c799e">high
marginal income tax rates at certain income levels</a> up to 400 percent of the
Federal Poverty Level. The CBO itself <a href="https://www.cbo.gov/publication/51065">estimates</a> this will cost two
million jobs in 2025. <a href="https://www.forbes.com/sites/theapothecary/2017/03/11/how-paul-ryans-obamacare-replacement-would-trap-millions-in-poverty-and-how-to-fix-it/#4dec6d3d4168">Avik
Roy explains</a> this drawback is also a feature of the AHCA’s tax credits,
which are adjusted for age. However, the tax credits are not adjusted for
income for people whose incomes are higher than the Medicaid cut-off and up to
$75,000 for an individual or $150,000 for a family.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">According to Dr. Roy’s analysis, a 40-year
old with an income up to about $12,500 would be on Medicaid, which is “free.” Once
he earns $12,501, he gets kicked off Medicaid and has to buy individual health
insurance for just under $2,000 annually, after having been helped by the
AHCA’s tax credit.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">For anyone around that income level, this
provides a huge disincentive to work. However, the effect does not impact
anyone already earning more than $12,500. Nobody else earning higher incomes
would suffer this disincentive under the AHCA. </span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">Under Obamacare,
catastrophically high marginal income taxes attack individuals all the way up
the income scale to just under $50,000 for a single person or $100,000 for a
family of four.<o:p></o:p></span></div>
<br />
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14pt;">For any working person who wants to be
free of worrying whether working an extra shift or getting a promotion will
cause a drop in her income after paying for health insurance, the GOP Obamacare
replacement bill offers meaningful relief.</span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-23750573587680487052017-03-15T12:28:00.003-07:002018-03-02T13:08:27.464-08:00Health Technology Forum: DC April 11 - The Promise of 21st Century CuresThe next Health Technology Forum: DC Meetup will be on April 11 at 6 p.m. in Washington, DC.<br />
<br />
The topic will be <i><b>The Promise of 21st Century Cures</b>.</i> Last December, President Obama signed his last bill, the 21st Century Cures Act, which promises to significantly improve the pace of medical innovation.<br />
<br />
Please <a href="https://www.meetup.com/HealthTechnologyForum-DC/events/238443921/">learn more and RSVP at the Meetup group</a>.<br />
<br />
If you would like to nominate a speaker, please let me know.John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-19302606878463592622017-03-15T09:54:00.001-07:002018-03-02T13:08:27.420-08:00Medical Price Hikes Match CPI<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">Both the Consumer Price Index and the
price index for medical care rose just 0.1 percent in February. This is
the <a href="http://healthblog.ncpa.org/cpi-medical-care-rose-less-than-non-medical-prices-in-september/#sthash.coqID7DF.dpbs">sixth
month in a row</a> we have enjoyed medical price relief in the CPI. Even
prices of prescription drugs dropped by 0.2 percent. Some components – medical
equipment and supplies, outpatient hospital services, and health insurance
jumped a bit, but not enough to drive overall medical prices higher. Medical price
inflation contributed nine percent of CPI for all items.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">Over the last 12 months, however, medical
prices have increased much more than non-medical prices: 3.5 percent versus 2.7
percent. Price changes for medical care contributed 11 percent of the overall
increase in CPI.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">More than six years after the Affordable
Care Act was passed, consumers have not seen relief from high medical prices,
which have increased over twice as much as the CPI less medical care since Obamacare
took effect.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">See Figures I, II, and Table I Below the
fold:</span></div>
<a name='more'></a><o:p></o:p><br />
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14pt;">Many observers of medical prices decline
to differentiate between nominal and real inflation. Because CPI is has been
low until recently, even relatively moderate nominal price hikes for medical
care are actually substantial real price hikes.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">Figure I demonstrates medical prices have
increased over twice as much as CPI less medical care since March 2010, when
the law was signed.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2ZF3tOSG-WFZ7s1p7-yuYND2hE39T56QDGrnVUQ3ytGR7rMAYgpQwGKGPQ56RIj672zAFo6wmJ1QxBvTuP_IHxt_wuHx4YVTn8okg4F2a7vosAnpvXIZvT2tjGWoktm5awiPHGt7PlvzM/s1600/FI.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2ZF3tOSG-WFZ7s1p7-yuYND2hE39T56QDGrnVUQ3ytGR7rMAYgpQwGKGPQ56RIj672zAFo6wmJ1QxBvTuP_IHxt_wuHx4YVTn8okg4F2a7vosAnpvXIZvT2tjGWoktm5awiPHGt7PlvzM/s1600/FI.jpg" /></a></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14pt;">Figure II demonstrates the same since
December 2013, the last month before plans in force in Obamacare’s exchanges
started coverage.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEid-H0cuDwP_0lTfiMl6VVsYV4XaL3FweJdfStVcwgXaChJoV1_B6JHnjmXRPckWu8uK03_ANozCI86tCKxmn6Rq7vYgL5s-GeYWwGfh1Ps59gj-UV7GfqTxoCbozP6-dai5b2lKcdg67Jk/s1600/F2.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEid-H0cuDwP_0lTfiMl6VVsYV4XaL3FweJdfStVcwgXaChJoV1_B6JHnjmXRPckWu8uK03_ANozCI86tCKxmn6Rq7vYgL5s-GeYWwGfh1Ps59gj-UV7GfqTxoCbozP6-dai5b2lKcdg67Jk/s1600/F2.jpg" /></a></div>
<div class="separator" style="clear: both; text-align: center;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMKAwsSTeuWEI39SZNXvjrngB09n_TAmbCVc9enEKrAMim7YoBD7lZnWSHPBlyNWXLCQrh6HLFOYUiRfok0Pemh9aruL8HHq9z74vdxO8JfnK7NLE_778jXuakjfW-HTYm-76ZZlkR_Ilr/s1600/TI.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMKAwsSTeuWEI39SZNXvjrngB09n_TAmbCVc9enEKrAMim7YoBD7lZnWSHPBlyNWXLCQrh6HLFOYUiRfok0Pemh9aruL8HHq9z74vdxO8JfnK7NLE_778jXuakjfW-HTYm-76ZZlkR_Ilr/s1600/TI.jpg" /></a></div>
<div class="MsoNormal" style="line-height: normal;">
<br /></div>
<div class="MsoNormal" style="line-height: normal;">
<i><u><span style="font-family: "times new roman" , serif; font-size: 14.0pt;">Technical Note</span></u></i><span style="font-family: "times new roman" , serif; font-size: 14.0pt;">: Professor
Christopher Conover <a href="http://www.forbes.com/sites/theapothecary/2015/11/23/healthcare-inflation-reaches-6-decade-low-what-caused-it-will-it-be-sustained/#3ad99199380c">explains</a> why
some scholars de-emphasize CPI and medical CPI as appropriate measures of
inflation for health care, preferring another dataset, Personal Consumption
Expenditures (PCE). There are very good reasons for such a conclusion. However,
CPI comes out monthly. The PCE price index is updated only quarterly, and that
is only for services. Prices for goods, such as drugs and medical devices, are
updated only annually. Plus, consumers only really care about price increases
they experience directly, not price increases borne by other economic actors.<o:p></o:p></span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-1333696993397365172017-03-15T06:45:00.000-07:002018-03-02T13:08:27.292-08:00Is Health Insurance A Cause of Past-Due Debt?<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">A <a href="https://consumermediallc.files.wordpress.com/2017/03/past_due_medical_debt.pdf">study</a> of
past-due medical debt by Michael Karpman and Kyle J. Kaswell of the Urban
Institute demonstrates the expansion of coverage subsequent to the Affordable
Care Act is associated with a reduction in the proportion of adults with
past-due medical debt.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">In 2012, 29.6 percent of U.S. adults had
past-due medical debt, versus just 23.8 percent in 2015. The study does not
define “past-due,” nor the average amount of medical debt that is past-due.
However, it cites research that almost half of debt in collections is owed to
hospitals and other providers.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">Although health insurance is supposed to
protect us from such a situation, it often does not. Among insured people, 26.6
percent had past-due medical debt in 2012, versus 22.8 percent in 2015.
However, among <i>uninsured</i> people it declined <i>more</i>:
39.8 percent in 2012, versus 30.5 percent in 2015. What to make of this?</span><br />
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<v:imagedata croptop="-65520f" cropbottom="65520f"/>
</v:shape><span style='mso-element:field-end'></span><![endif]--><span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman", serif; font-size: 14pt;">Obamacare is associated with a bigger
impact on past-due medical debt among those who remained uninsured than the
insured, that would be an odd outcome. (Actually, it is more likely the large
improvement among the uninsured is a result of adverse selection into insurance
due to Obamacare. Those who remained uninsured were more likely to be healthy,
therefore less likely to have medical debt.)</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">Further, <a href="http://blog.independent.org/2016/01/12/two-years-into-obamacare-no-change-in-share-of-working-age-americans-with-trouble-paying-medical-bills/">other
research</a> indicates no change in the proportion of Americans having
trouble paying medical bills from 2005 through 2015. What really stands out in
the Urban Institute study is the proportion of 18 to 24-year olds with past-due
medical debt: 27.3 in 2012 versus 21.1 percent in 2015.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">Seriously? One in five Americans aged 18
through 24 has past-due medical debt? What could possibly drive that? I
suggest health insurance itself is a cause. We still have a system where
insurers control prices and charges. People have little idea how much they will
pay out of pocket until long after they receive care. Claims have to be
processed, Explanations of Benefits (EOBs) and invoices have to be mailed.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14.0pt;">Another Urban Institute <a href="http://www.urban.org/research/publication/delinquent-debt-america">study</a> defines
credit card debt past-due if it is over 30 days late. That study also reported
35.1 percent of adults had debt in collection in 2014! The average amount was
$5,178, or 7 percent of average household income of $72,254. As noted above, a
big chunk of this is medical debt.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "times new roman" , serif; font-size: 14pt;">Indeed, it would be virtually impossible
for an American patient to pay a medical bill within 30 days. If we paid our
doctors directly, instead of sending our money on a convoluted voyage through
insurers’ bureaucracies, medical debt would go down a lot – especially among
young adults.</span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-11327138583503555182017-03-14T11:08:00.001-07:002018-03-02T13:08:27.206-08:00PPI: Health Prices Mixed, Inflation Low<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8GhI3kEiZhBDHG7NzUKJgODiClLODdCN0tkSqO7kF9xhvMl0JZpfq5c85RFXBXjN3c9K_upA2lBsvhoBVtuRSdZuTsrJmnKQLe_82spIO7gSiWn5qqXVMRrX_gU3ZdAwyVeQor_CrGWig/s1600/BLS.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="65" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8GhI3kEiZhBDHG7NzUKJgODiClLODdCN0tkSqO7kF9xhvMl0JZpfq5c85RFXBXjN3c9K_upA2lBsvhoBVtuRSdZuTsrJmnKQLe_82spIO7gSiWn5qqXVMRrX_gU3ZdAwyVeQor_CrGWig/s320/BLS.jpg" width="320" /></a></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "times new roman" , serif; font-size: 13.5pt;">February's
Producer Price Index rose 0.3 percent. However, prices for many health goods
and services grew slowly, if at all. Nine of the 16 price indices for health
goods and services grew slower than their benchmarks.* Prices for medical lab
and diagnostic imaging actually deflated in absolute terms.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "times new roman" , serif; font-size: 13.5pt;">Even
pharmaceutical preparations for final demand, for which prices increased
most relative to their benchmark, increased by just 0.4 percent. Although 0.3
percentage points higher than the price change for final demand goods less food
and energy (0.1 percent), this is still tame relative to the trend of
pharmaceutical prices. Among services for final demand, only price for health
insurance and nursing homes rose higher than their benchmark.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "times new roman" , serif; font-size: 13.5pt;">With
respect to diagnosing whether health prices are under control, the February PPI
is about as mixed as <a href="http://healthblog.ncpa.org/ppi-health-prices-mixed-amidst-inflation/#sthash.tTFLWxFQ.dpbs">January’s</a>
was.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "times new roman" , serif; font-size: 13.5pt;">See
Table I below the fold:</span></div>
<a name='more'></a><div class="separator" style="clear: both; text-align: center;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgw0cDbRt3nnsqrB6bQn6zo-omE8_G-Nceonqa2gBKnpG7uxDUvAaCrqeKEpOe0VpyobRqCvxK-AjkCN84anr-4b1opmw3e85UG2yctzMqqzstinSdDmZjZk4eyJkzVmnvp-o6YnU77uEFZ/s1600/TI.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgw0cDbRt3nnsqrB6bQn6zo-omE8_G-Nceonqa2gBKnpG7uxDUvAaCrqeKEpOe0VpyobRqCvxK-AjkCN84anr-4b1opmw3e85UG2yctzMqqzstinSdDmZjZk4eyJkzVmnvp-o6YnU77uEFZ/s1600/TI.jpg" /></a></div>
<o:p></o:p><br />
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "times new roman" , serif; font-size: 13.5pt;">Over
the last twelve months, prices of 10 of the 16 health goods and services have
increased slower than their benchmarks. Prices of X-Ray and electromedical
equipment stand out, having shrunk 0.7 percent, an absolute decline of 2.7
percentage points versus final demand goods (less food and energy).
Pharmaceutical preparations stand out on the high side, having increased 6.6
percent, or 4.6 percentage points more than final demand goods (less food and
energy). On the other hand, prices for medicinal and botanical chemicals
declined 1.2 percent, 6.7 percentage points more than processed goods for
intermediate demand, less foods and feed.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "times new roman" , serif; font-size: 13.5pt;">The
Consumer Price Index will be published tomorrow.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "times new roman" , serif; font-size: 13.5pt;">*The
benchmarks are the core measurements under which the health measurements are
found. That is, final demand goods less food and energy is the benchmark for
the three measurements (pharmaceutical preparations, X-Ray and electromedical
equipment, and medical, surgical, and personal aid devices) listed under that
core measurement; final demand services less trade, transportation, and
warehousing is the benchmark for the eight health measurements listed under
that core measurement, et cetera.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "times new roman" , serif; font-size: 13.5pt;"><br />
**Dental care is dominated neither by government nor private insurance, so
dental price increases are not explained by NCPA’s usual theory of health
inflation. I addressed dental price increases in a <a href="http://healthblog.ncpa.org/government-and-the-cost-of-dental-care/#sthash.ISmkyDMM.dpbs">previous
article</a>.<o:p></o:p></span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-32116433609830099702017-03-13T11:03:00.003-07:002018-03-02T13:08:27.635-08:00Pharmaceutical Profits And Capital Markets<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">An
interesting <a href="http://healthaffairs.org/blog/2017/03/07/rd-costs-for-pharmaceutical-companies-do-not-explain-elevated-us-drug-prices/comment-page-1/#comment-2629090">research
article</a> at the <i>Health Affairs</i>
blog asserts there is no relationship between high U.S. prescription drug
prices and drug companies’ research and development budgets. The point of the
article is to debunk the argument that research-based drug companies must earn
high profits if they are going to reinvest in R&D. While the data are
correct, the article misunderstands the nature of capital markets.</span></div>
<a name='more'></a><o:p></o:p><br />
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">The
authors point out that U.S. prices for patented prescription drugs are
significantly higher, in real dollars, than prices in other developed
countries. (Most observers claim this is because foreign governments impose
price controls. I think it is more attributable to </span><a href="http://blog.independent.org/2016/10/27/say-what-global-charity-rejects-free-vaccines/" style="font-family: "Times New Roman", serif; font-size: 13.5pt;">price
differentiation due to variation in national income per capita.</a><span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">)</span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">The
analysis estimates the amount of revenues attributed to the 15 companies which
sell the top 20 drugs (by worldwide sales) which are attributable to U.S.
“premium” pricing. It finds those revenues exceed the R&D budgets of the
firms which earn them - $166 billion versus $66 billion, in 2015. It also lists
the amounts by company. For example, Merck earns about $11 billion from U.S.
“premium” pricing, which is 159 percent of its R&D budget.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">These
“premium” prices derive from patents, which prevent other drug-makers from
copying medicines invented by innovators, for a limited time. In a static
sense, that means an innovator earns high profits if doctors prescribe its medicines.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">However,
that innovator does not get to keep its profits, and the capital market does
not expect it to. Instead, investors decide every day whether they trust that
management to invent more new drugs. If other management teams promise better
opportunities, the firms in this analysis must distribute capital back to their
investors via dividends or share buybacks.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Indeed,
there is a lot of fretting among the large research-based drug-makers that they
are too large and bureaucratic to be innovative. The purpose of patents is not
to keep profits recycling through the same 15 largest drug-makers. It is to
give investors confidence that when the profits are returned to them they can
reinvest them in the next generation of lifesaving medicines, wherever their
inventors can be found.<o:p></o:p></span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-80338877655326440822017-03-10T09:59:00.003-08:002018-03-02T13:08:28.147-08:00Slow Growth, Downward Revisions in Health Jobs Continue<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjEm2_0CIQKjrTSRHHNcbFD_9bldBx4mQvpA-2Wn3tIl93eLvvkzRgR4FIX69Rbi5BVED9ocnx7m0DGCgcwLbz6Aq9ae5iVm9WzgRqMrUvYrtxUnpwqULOFYfTIHsHeDJVz7iJTqapvHMIZ/s1600/BLS.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjEm2_0CIQKjrTSRHHNcbFD_9bldBx4mQvpA-2Wn3tIl93eLvvkzRgR4FIX69Rbi5BVED9ocnx7m0DGCgcwLbz6Aq9ae5iVm9WzgRqMrUvYrtxUnpwqULOFYfTIHsHeDJVz7iJTqapvHMIZ/s1600/BLS.jpg" /></a></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;">For the second month in a row, the
Employment Situation Summary showed a slowing down in the growth of jobs in
health services versus non-health jobs, relative to recent history. Further, revisions
to data in this morning’s very strong jobs report indicate high job growth reported
in health services for December and January were not correct.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Health jobs increased only 0.17 percent in
this morning’s jobs report, versus 0.16 percent for non-health jobs. With 27,000
jobs added, health services accounted for 11 percent of new nonfarm civilian jobs.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">This continues a welcome development. The
previous disproportionately high share of job growth in health services was
a </span><a href="http://healthblog.ncpa.org/obamacares-perverse-job-creation-program/#sthash.Kk7vOWTM.jhQzMF1m.dpbs"><span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">deliberate outcome
of Obamacare</span></a><span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">.
If this trend persists, it will become increasingly hard to carry out reforms
that will improve productivity in the delivery of care.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">Ambulatory sites added jobs at a much
faster rate than hospitals (0.25 percent versus 0.12 percent). This was
concentrated in physicians’ offices and home health. This is a good sign
because these are low-cost locations of care.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;">See Table I below the fold:</span></div>
<a name='more'></a><o:p></o:p><br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiVb2MPlGTrCy0cAfcuQoZ1LDvNLFjuMwTKpcQvx5eAeno5j82dTLqtEDOr9ODs2NzkGJ2Xkq-uZhfay-XvGMyn_Zj5ytzRT0iJfG9d_ZNdNLnQOxrFf7s9dNdM-ZfIo4QDlsroavaoIy9w/s1600/TI.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiVb2MPlGTrCy0cAfcuQoZ1LDvNLFjuMwTKpcQvx5eAeno5j82dTLqtEDOr9ODs2NzkGJ2Xkq-uZhfay-XvGMyn_Zj5ytzRT0iJfG9d_ZNdNLnQOxrFf7s9dNdM-ZfIo4QDlsroavaoIy9w/s1600/TI.jpg" /></a></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 14.0pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;">Year on year, health jobs still outpace non-health
jobs, having grown 1.5 times faster (2.33 percent versus 1.56 percent).
However, jobs in medical and diagnostic labs declined a little (Table II).</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEisIb_q-2Tl-PEW-neli5fdkVmQWNysa5Vt4GuhgT1nMkItG2VtHGjGQin0XbUA-6GEA9gMnxr9KDLI_101ghbAf7Jdmpc0VtAp4sM0d2xEAlysVzFrykLFcjpnUxS7riY5EBGRHnaMLxY4/s1600/TII.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEisIb_q-2Tl-PEW-neli5fdkVmQWNysa5Vt4GuhgT1nMkItG2VtHGjGQin0XbUA-6GEA9gMnxr9KDLI_101ghbAf7Jdmpc0VtAp4sM0d2xEAlysVzFrykLFcjpnUxS7riY5EBGRHnaMLxY4/s1600/TII.jpg" /></a></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;"><br /></span></div>
<br />
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;">There has been a very large downward
revision in the stock of health jobs by 130,000 from December, versus the
initial report; and also a downward revision for January. Correspondingly, the
stock of non-health jobs from the previous two months has been revised upward
significantly (Table III).</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 14pt;"><br /></span></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiE535ujTni4X9BvvuwrIhQaxz8EKYuao1XWsfN0azM-8M07COZy1eylsKXB0vrmI8l60fdxTmq67EhcEFzn7IbdNta6ED4rSVjD3lyPcgTglQnXA9ZitQVSbje98cIbcvTTDVFCi7CH5Ey/s1600/TIII.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiE535ujTni4X9BvvuwrIhQaxz8EKYuao1XWsfN0azM-8M07COZy1eylsKXB0vrmI8l60fdxTmq67EhcEFzn7IbdNta6ED4rSVjD3lyPcgTglQnXA9ZitQVSbje98cIbcvTTDVFCi7CH5Ey/s1600/TIII.jpg" /></a></div>
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<span style="font-family: "Times New Roman", serif; font-size: 14pt;"><br /></span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-70685991636940639712017-03-09T09:10:00.001-08:002018-03-02T13:08:27.976-08:00QSS: Good Growth in Health Services Revenue<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt; line-height: 107%;">This morning’s Quarterly Services Survey (QSS),
published by the Census Bureau, showed good revenue growth across health
services, except for specialty hospitals. </span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt; line-height: 107%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt; line-height: 107%;">Overall, revenue grew 4.2 percent in
the fourth quarter. Further, growth versus Q4 2015 was a strong 6.9 percent and
YTD growth is up 5.9 percent. Only specialty (except psychiatric and substance
abuse) hospitals showed a decline. Revenue at outpatient care centers has grown
10.5 percent, Q4 2016 versus Q4 2015, a remarkable growth which hopefully
reflects a change in location of care to lower cost settings versus hospitals. Although, hospitals’ revenues still grew a healthy 7.5 percent.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt; line-height: 107%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt; line-height: 107%;">See Table I below the fold:</span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt; line-height: 107%;">Further, measurements of operating profit at
tax-exempt hospitals grew dramatically: Both net revenue per inpatient day and
net revenue per discharge rose by over 20 percent. Further, both measurements
increased by over 35 percent, Q4 2016 versus Q4 2015, and by over 19 percent
year to date. Taxable hospitals’ margins improved a little, but are still
negative longer term (Table II).<o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5IzyG0c5e_clSlYWlrxOS_pMRip7BwtLief4RUw80aRQCuL9xxbzzUGEVXjfJ-6AsOzwhrGUlYaIMRrf9U7dDzPr8qRq530YF2tZsnMAXnhFyoMatt_LOUbXMo-6GbkXryZRV7rN5dDzM/s1600/TII.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="308" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5IzyG0c5e_clSlYWlrxOS_pMRip7BwtLief4RUw80aRQCuL9xxbzzUGEVXjfJ-6AsOzwhrGUlYaIMRrf9U7dDzPr8qRq530YF2tZsnMAXnhFyoMatt_LOUbXMo-6GbkXryZRV7rN5dDzM/s640/TII.jpg" width="640" /></a></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Health services continue to do very well
out of Obamacare, which likely explains their resistance to the American Health
Care Act, recently introduced by Republican committee chairman in the U.S.
House of Representatives and supported by President Trump.<o:p></o:p></span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-71728106490363017502017-03-08T12:43:00.000-08:002018-03-02T13:08:28.019-08:00Every State Must Close Obamacare’s Special Enrollment Loopholes<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">(A
version of this Health Alert was published by </span><a href="https://www.forbes.com/sites/theapothecary/2017/03/08/every-state-must-close-obamacares-special-enrollment-loopholes-to-reduce-premium-growth/#6b2e7cac1117" style="font-family: "Times New Roman", serif; font-size: 13.5pt;"><i>Forbes</i></a><span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">.)</span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">So,
the Republican Repeal-and-Replace Obamacare train has finally left the station.
Although free-market health reformers are divided on the merits of the American
Health Care Act, as introduced by the Energy & Commerce and Ways &
Means Committees of the U.S. House of Representatives, no-one can deny the
Republicans have kept their promise to take up health reform as their first
order of legislative business.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">However,
new legislation takes a long time to get to the President’s desk. Meanwhile,
the Trump Administration has the unenviable task of enforcing a law they know
harms Americans. They are doing the best they can to offer relief through
administrative rule-making.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">On
February 17, the Centers for Medicare & Medicaid Services proposed a new
rule to address one reason why Obamacare premiums jumped <a href="http://jrghealthsectoranalysis.blogspot.com/2016/10/obamacare-2016-premium-hikes-25-percent.html">25
percent this year</a>: The exchanges attract too many sick people and not
enough healthy people. This is called a death spiral; and one reason it occurs
is the Obama Administration allowed people to jump in and out of the exchanges
too easily.</span></div>
<a name='more'></a><o:p></o:p><br />
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<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">People
were able to abuse Special Enrollment Periods (SEPs). As with employer-based
plans, health insurers in exchanges must accept applicants at any time of the
year if they qualify for special enrollment. However, these qualifying events
are not related to health status. Marriage, change of employment, or a
long-distance move are examples of events that qualify an applicant for special
enrollment.</span></div>
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<br /></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">However,
there is evidence special enrollment is being abused. According to <a href="http://avalere.com/expertise/life-sciences/insights/consumers-enrolling-in-exchanges-through-special-enrollment-periods-have-hi">Avalere
Health</a>, special enrollees cost 5 percent more than those who enrolled
during open season in 2015. Further, they only enrolled for an average of 3.6
months versus 7.8 months for those who enrolled during open season. This
suggests some applicants have figured out how to game special enrollment. They
apply for coverage once they have become sick, and drop it after treatment.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><a href="http://www.cbpp.org/health/insurers-push-to-restrict-special-enrollment-periods-would-block-uninsured-people">Some
analysts claim</a> health insurers are exaggerating this problem; and that
tightening rules for special enrollment will dissuade healthy people from
applying for coverage. This leads to the conclusion that rules for special
enrollment should be eased to attract healthy applicants. However, if that were
the case, health insurers would surely be lobbying for such changes. After all,
insurers cannot claim Obamacare tax credits unless they enroll people. If they
thought loosening standards for special enrollment would attract more healthy
people, they would endorse that.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">This
adverse selection for special enrollment is likely due to the Obama
Administration having allowed applicants to “self-attest” their qualifying
event. The proposed rule will demand verification. For example, if an applicant
gets married, he or she will have to provide evidence of having become married
within 30 days of the wedding. That is not too high a hurdle.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">The
proposed rule also seeks to impose a continuous coverage requirement for
special enrollment. For example, a person who moves to a new city cannot apply
for special enrollment unless he had coverage in his previous city, with a
look-back of 60 days.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">This
is too long. The ACA indicates the continuous coverage provisions for special
enrolment should replicate those in the employer-based market. Individuals
eligible for group coverage who lose other coverage must apply for group
coverage within 30 days (unless coming from Medicaid or Children’s Health
Insurance Program, in which case they have 60 days to apply). The exchanges
should replicate this rule.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Another
problem is that the proposed rule would only enforce this in states using
Federally Facilitated Marketplaces (that is, healthcare.gov). Anticipating
state-based exchanges would have trouble enforcing this rule for 2018, CMS
seeks comment on whether there should be a transition period for state-based
exchanges, or even that it remain optional for them.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">On
the contrary, giving state-based exchanges a “pass” on enforcing reasonable
standards of verification and continuous coverage for special enrollment would
be completely against the spirit (and arguably the letter) of the ACA. The
original intent of ACA was that each state would establish an exchange. Indeed,
there is strong <a href="https://www.forbes.com/sites/michaelcannon/2013/12/31/for-reporters-law-professors-citizens-a-reference-guide-to-president-obamas-illegal-obamacare-taxes/#4cb684b3c42a">legislative
history</a> indicating the federal government wanted and sought to induce every
state to establish and exchange.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">States
which did not establish exchanges did federal taxpayers a favor. States
establishing exchanges <a href="https://kaiserhealthnews.files.wordpress.com/2014/05/5-7-14-exchanges-report.pdf">received
grants</a> totaling $3.9 billion through 2014 to help finance their exchanges.
Those states enrolled about 2.6 million people in 2014, costing federal
taxpayers $1,503 per enrollee. The majority of states, which did not establish
exchanges, enrolled about 5.4 million people but only received grants totaling
less than one billion dollars, or an average of just $152 per beneficiary.<o:p></o:p></span></div>
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Those states which established their own exchanges took billions of dollars of
federal taxpayers’ money for the express purpose of being ready to execute
Obamacare enrollment according to the law and regulations. CMS must enforce the
new regulations equally among all the states. Non-enforcement would continue to
put federal taxpayers at risk because states with state-based exchanges would
not be taking important steps to stabilize the market.<o:p></o:p></span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-75290598631739373132017-03-06T07:35:00.003-08:002018-03-02T13:08:28.062-08:00Replacing Obamacare with A Means-Tested Tax Credit<div class="MsoNormal">
<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">In his joint address to Congress last Tuesday,
President Trump promoted the idea of a tax credit to support people’s purchase
of health care. This is in line with the approach taken by Secretary Tom Price
when he was in Congress, and that of the House Republican leadership.</span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt; line-height: 107%;">Some self-styled conservatives oppose a refundable tax
credit because it would cost taxpayers a lot of money. That which we currently
understand to be the Republican replacement bill would offer a tax credit to
individuals based on age but not on income, if they do not get employer-based
health benefits.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt; line-height: 107%;">That may be changing to a means-tested tax credit in
order to win the support of conservative Republican lawmakers. “Oh, the irony,”
<a href="https://www.axios.com/theres-an-emerging-gop-push-to-tie-obamacare-replacement-tax-credits-t-2293295436.html">exclaims
one journalist</a>: Don’t those Republicans know Obamacare contains
means-tested tax credits? It’s still Obamacare-Lite!<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt; line-height: 107%;">No, it would not be.</span></div>
<a name='more'></a><br />
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<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">I have long supported a universal tax credit that
everyone, even Warren Buffett or Bill Gates could claim. However, this would be
“paid for” by eliminating the exclusion of employer-based benefits from
workers’ taxable income and Medicaid, the joint state-federal welfare program.</span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt; line-height: 107%;">Unfortunately, the business community resists any
change to the former and Republican politicians seem incapable of considering
Medicaid outside its current budget silo. (The proposal to change federal
Medicaid financing in to a block grant or per capita grant comes close. To
eliminate Medicaid as we know it, Republican politicians just need to
understand tax credits due to individuals who do not claim them would be
transferred to their states of residence to fund the safety net.)<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt; line-height: 107%;"><br /></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt; line-height: 107%;">So, a means-tested tax credit may be the best reform
we get. Is it Obamacare-Lite? Not really, especially if the tax credit phased
out at a flat rate. I previously <a href="https://www.forbes.com/sites/theapothecary/2015/06/24/king-v-burwell-fix-obamacares-job-killing-tax-credits/2/#11530c935d9a">estimated</a>
a claw-back of 13.5 percent within the same income bands Obamacare offers tax
credits would be budget neutral relative to the <i>status quo</i>.<o:p></o:p></span></div>
<br />
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt; line-height: 107%;">This would eliminate Obamacare’s significant marginal
income-tax “cliffs” within those age bands, which limit work incentives. It
would be a significant improvement to Obamacare.<o:p></o:p></span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-69688400850635325732017-03-02T10:59:00.004-08:002018-03-02T13:08:27.891-08:00Why Do Late Middle-Aged Women Allow Obamacare To Gouge Them?<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">In February, Professor Mark Pauly of the
Wharton Business School wrote a </span><a href="http://ldi.upenn.edu/healthpolicysense/how-save-individual-insurance-market-post-aca" style="font-family: "Times New Roman", serif; font-size: 13.5pt;">short
article</a><span style="font-family: "Times New Roman", serif; font-size: 13.5pt;"> proposing reforms to individual health insurance, in which he
reminded us the biggest premium hike in the market for individual insurance
consequent to Obamacare was among women in their 60s. The </span><a href="http://www.nber.org/papers/w20223" style="font-family: "Times New Roman", serif; font-size: 13.5pt;">actual research</a><span style="font-family: "Times New Roman", serif; font-size: 13.5pt;"> was published in
2014, but I have wondered about it ever since.</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Obamacare prevents insurers from charging
premiums for 64-year olds that are more than three times those charged to
18-year olds. (A multiple of about five would be fairer, according to <a href="http://www.naic.org/documents/topics_health_insurance_rate_regulation_brief.pdf">actuaries’
consensus</a>.) Intuition tells us that should reduce premiums for older
people. That intuition is <a href="http://blog.independent.org/2014/11/03/obamacare-premiums-increased-dramatically-for-every-age-group-in-2014/">wrong</a>.
Nevertheless, if politicians can convince people it is true, it makes political
sense to impose the rule, because older people are much more likely to vote
than younger people.</span></div>
<a name='more'></a><o:p></o:p><br />
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">However, Obamacare also prevents insurers
from charging different premiums to men and women of the same age.
Pro-Obamacare politicians have a provocative slogan: “Being a woman should not
be a pre-existing condition.”</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Because Obamacare mandates maternity benefits,
women of childbearing age cost a lot more than men. So the rule hikes young
men’s premiums. Because men in late middle age have “bad habits” (according to
Pauly), their health care costs more than older women’s health care does. So,
it hikes those women’s premiums.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Politically, this is hard to figure out.
Pre-election polling indicated 69 percent of women aged 18 to 34 supported
Hillary Clinton, but only 60 percent of women aged 50 to 64 did. </span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">That alone
suggests Democratic (therefore pro-Obamacare) politicians would seek younger
women’s support by imposing a rule that favors them but punishes older women.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">But does this overwhelm voter turnout? In
the <a href="http://www.cawp.rutgers.edu/sites/default/files/resources/genderdiff.pdf">2012
election</a>, only 44.5 percent of women aged 18 to 24 voted, while 69.5
percent of those aged 45 to 64 voted. So, in raw numbers, there are surely more
late middle-aged women who vote Democrat than young women.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Perhaps this mystery is explained by the
fact each (heterosexual) married household forms a single economic unit, so is
indifferent to the rule. (If the household is young, the wife gets a discount
and the husband a premium; whereas if the household is old it is the other way
around. Nevertheless, the total premium should be unaffected by the rule.)<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">According to an <a href="http://flowingdata.com/2016/12/08/marital-status-by-age/">analysis</a> of
census data by statistician Nathan Yau, only about one third of women in their
mid-20s are married. By their mid-30s, this peaks at about 60 percent, which
gently declines until the women start becoming widows in their late 60s (by
which time they are on Medicare).</span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">So, by virtue of marriage, a smaller share
of late middle-aged women would recognize this rule as a tax on their age and
sex. Too bad: It would be interesting to watch Nancy Pelosi and Hillary Clinton
answer them for it.</span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-17079162828329313072017-03-01T11:40:00.003-08:002018-03-02T13:08:27.334-08:00Health Construction Declined in January, Robust Year on Year<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhkjAxFGvX1HjUuJZGc_84C8vNeTmkUiI3QblNOceKE4VNg5L7GhS6WyzEF-BRu93sEKR8c-6KLAe9sGCJ4aGCIKylaKJLtHSalO2wcE37W-sYJR6kTkQWr3MDJJ24QWJ6ChuGthGMB_h5Y/s1600/Census.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhkjAxFGvX1HjUuJZGc_84C8vNeTmkUiI3QblNOceKE4VNg5L7GhS6WyzEF-BRu93sEKR8c-6KLAe9sGCJ4aGCIKylaKJLtHSalO2wcE37W-sYJR6kTkQWr3MDJJ24QWJ6ChuGthGMB_h5Y/s1600/Census.jpg" /></a></div>
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<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">The construction market was weak overall
in January, especially in health facilities, where construction starts declined
1.6 percent from December. Other construction starts declined only 1.0 percent.
Health facilities construction accounted for just under six percent of the
value of all new nonresidential construction (Table I).</span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Construction of private health facilities dropped
0.2 percent, versus an increase of 0.3 percent for private non-health
facilities. Private health facilities construction starts accounted for over
seven percent of private nonresidential construction starts. </span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Construction of
public health facilities dropped by 6.6 percent. However, construction of other
public facilities dropped by 4.9 percent. In other words, the decline in health
facilities construction was 0.4 percentage points worse than the change in
non-health private construction, versus 1.7 percentage points worse than
non-health public construction.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">However, there was a significant
difference between private and public construction year on year. Non-health
private construction increased 7.3 percent, while private health facilities
construction increased 8.1 percent. Public non-health facilities construction
increased 1.3 percent, while public non-health facilities construction dropped
by 9.3 percent.<o:p></o:p></span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0tag:blogger.com,1999:blog-2047195573424044176.post-2467145397794855632017-03-01T10:17:00.003-08:002018-03-02T13:08:27.507-08:00Repealing Obamacare Will Create Jobs<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">(A version of this Health Alert was
published by <a href="http://www.insidesources.com/counterpoint-repealing-obamacare-will-create-not-destroy-jobs/">InsideSources.com</a>
and widely syndicated in local newspapers.)<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Obamacare channeled billions of dollars
out of the productive economy and diverted it towards a health-services sector
that has become even more bloated than it was before 2010. <o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Last July, Dr. Bob Kocher, a venture
capitalist who served as a special assistant to President Obama when the
Affordable Care Act was created, <a href="http://blog.independent.org/2016/07/13/obamacares-perverse-job-creation-program/">noted</a>
that more than half of all health care workers today are administrators, up
from just over a third before Obamacare became law.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">These are paper pushers, not doctors and
nurses—not the kind of jobs we should be bragging about.</span></div>
<a name='more'></a> <o:p></o:p><br />
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<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">Because Obamacare diverted money into
health spending, technically lots of jobs have been added by the health care
sector. This provides cover for a superficial story that Obamacare has been a
job-creation machine.</span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Scholars affiliated with the Milken
Institute School of Public Health at George Washington University <a href="https://publichealth.gwu.edu/sites/default/files/downloads/HPM/Repealing_Federal_Health_Reform.pdf">estimate</a>
Obamacare repeal would kill 2.6 million jobs by 2019. Almost a million jobs
would be lost from health services while the balance would be lost in
construction, real estate, retail, finance and insurance.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal;">
<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Unfortunately, such research relies on the
so-called “multiplier effect,” a politically seductive but misleading type of
analysis. To be sure, Obamacare throws money at hospitals, doctors’ offices,
and other health services. Those recipients build new facilities and hire more
workers, who spend their paychecks in their communities. <o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">But these are not true measurements of
economic growth. If Congress just sent a fleet of helicopters to scatter banknotes
from the sky, the same “multiplier effect” would take place: People would pick
the money up and spend it. Businesses located near the drop zones might profit,
and some might hire and expand. Jobs and the economy would not grow, however,
because the effect would be a mix of inflation and reduced spending in areas
away from the drop zones.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">In other words, excess job growth in
health services comes at the expense of job growth in other sectors. And it is
worse than that: Jobs in health services are actually recession-proof.
Hospitals did not need Obamacare to keep adding jobs.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Nonfarm civilian employment peaked in
January 2008 (at 138.4 million jobs), just before the Great Recession, and
bottomed out in February 2010 (at 129.7 million jobs). Jobs were lost in 24 of
those 25 months. Nonfarm civilian employment did not cross the January 2008
threshold again until May 2014. <o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">However, more than half a million jobs in
health services were <i>added</i> between
January 2008 and February 2010. In other words, health services added jobs
while the Great Recession destroyed 9.25 million other nonfarm civilian jobs <i>before</i> the Affordable Care Act was
passed in March 2010.</span></div>
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<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;"><br /></span></div>
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<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">Since then, Obamacare has caused a
significant distortion of the American workforce towards health services. This
has continued even as the economy has slowly recovered.</span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">By December 2016, the United States had
added 6.87 million jobs to the previous peak in January 2008. However, 2.59
million jobs—38 percent of the total—were in health services, which grew by 20
percent. By comparison, all other nonfarm jobs—in manufacturing,
transportation, mining, retail and services—grew only 3.42 percent, adding 4.29
million jobs.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;"><br /></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">And this counts only private health
services, not insurers and other middlemen or government employees added by
Obamacare. </span><span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">There can be such a thing as too much job
growth in one sector, and that is surely the case for health services today. Obamacare
didn’t create productive medical jobs, it created bureaucratic institutional
bloat.</span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">Workers and businesses outside the
healthcare bureaucracy have been paying the price of Obamacare’s rules,
regulations and mandates with sluggish job and wage growth. <o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 13.5pt;">The Affordable Care Act was not a jobs
bill. Hospitals do not need Obamacare to maintain steady employment.</span></div>
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<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;"><br /></span></div>
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<span style="font-family: "Times New Roman", serif; font-size: 13.5pt;">The rest of us, however, need Obamacare
repealed so the rest of the economy can add jobs at a more normal pace.</span></div>
John R. Grahamhttp://www.blogger.com/profile/09420909459359064358noreply@blogger.com0