Research Updates Now At Paragon Health Institute

 For followers of my research, please note I am not currently updating this blog. With the new Administration and new Congress about to make significant changes to health policy, I have joined the Paragon Health Institute as a Visiting Fellow. I am joining a great team and encourage you to follow the Paragon Health Institute on social media. I encourage you to sign up for weekly newsletters at https://paragoninstitute.org/newsletters/.

Putting Patients First: Innovative Solutions for Prescription Drugs & Older Americans

U.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).

The report also describes four policy options to reduce lower prices and expand access to treatment. Read more at this link.

Senate Aging Committee Ranking Member Scott Proposes Reforms to Long-Term Caregiving

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.”

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.

“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.”

The Expanding Opportunities for Older Americans report finds that:

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.

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.

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.

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.

Click HERE to view full report. 

Career Announcement and Status Update

Colleagues & Supporters,

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.

Please follow @SenateAgingGOP on Twitter and our hearings at aging.senate.gov.

JRG Health & Human Services is Back in Business!

Welcome to the first new blog entry since March, 2017. What have I been doing all these years? Well, it is quite a story......

I left the U.S. Department of Health & Human Services on January 20 after almost four years in two positions.

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).

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.

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.

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.

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.

Nevertheless, I will do some research and writing. Thank you for waiting!

Time Out From Writing and Speaking

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.

This blog and other communications outlets are suspended indefinitely. 

Thank you for your support, readership, and input.

Best wishes.

Health Technology Forum: DC Meetup April 11 First Speaker Announced

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).

21st Century cures implemented a wide variety of provisions across drugs, devices, and other medical specialties aimed improving patient care through foster innovation.

Our first speaker is Diane Johnson of Johnson & Johnson. 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.

Third-Party Payment Is the Root Cause of Health System Dysfunction

(A version of this column was published by RealClearHealth.)

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.

Before the Affordable Care Act (ACA) passed in March 2010, President Obama repeatedly promised 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.

The Unindicted Conspirator: High Healthcare Spending and the Rise of Third-Party Payment

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.

Read my new research paper, published by The Mercatus Institute at George Mason University, at this link.

Average Wait Time to See A Physician Up 30 Percent in Three Years

Merritt Hawkins, a physician-staffing firm has published its periodic survey of waiting times for appointments with physicians in 30 metropolitan markets. The results:

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. 

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.

California Single-Payer Bill Looks Backward, Not Towards A New Era of Patient Choice

(A version of this Health Alert was published by the Orange County Register.)

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.

Whither Goes Your Health Insurance Premium?

AHIP, the trade association for health insurers, has a nifty infographic answering the question: “Where does your premium dollar go?”

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.”

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.”

Well, readers have to judge how “consumer-centric” those operations are.

Veterans Health Administration Realizes It Should Buy, Not Build Software

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.

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.

The Logic Defying CBO Obamacare Replacement Score Breaks Its Own Rules

(A version of this column was published by Forbes.com)

Dr. Tom Price, the U.S. Secretary of Health & Human Services has said the Congressional Budget Office’s recent “score” of the Republican Obamacare replacement bill defies logic. Even worse, it defies the very rules which govern the CBO.

The 2016 Budget Resolution, agreed by both the House and Senate in May 2015 directed the CBO to do so-called dynamic scoring 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.

Health Technology Forum: DC April 11 - The Promise of 21st Century Cures

The next Health Technology Forum: DC Meetup will be on April 11 at 6 p.m. in Washington, DC.

The topic will be The Promise of 21st Century Cures. Last December, President Obama signed his last bill, the 21st Century Cures Act, which promises to significantly improve the pace of medical innovation.

Please learn more and RSVP at the Meetup group.

If you would like to nominate a speaker, please let me know.

Medical Price Hikes Match CPI

Both the Consumer Price Index and the price index for medical care rose just 0.1 percent in February. This is the sixth month in a row 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.

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.

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.

See Figures I, II, and Table I Below the fold:

Is Health Insurance A Cause of Past-Due Debt?

A study 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.

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.

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 uninsured people it declined more: 39.8 percent in 2012, versus 30.5 percent in 2015. What to make of this?

PPI: Health Prices Mixed, Inflation Low

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.

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.

With respect to diagnosing whether health prices are under control, the February PPI is about as mixed as January’s was.

See Table I below the fold:

Pharmaceutical Profits And Capital Markets

An interesting research article at the Health Affairs 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.

Slow Growth, Downward Revisions in Health Jobs Continue

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.

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.

This continues a welcome development. The previous disproportionately high share of job growth in health services was a deliberate outcome of Obamacare. If this trend persists, it will become increasingly hard to carry out reforms that will improve productivity in the delivery of care.

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.

See Table I below the fold: